How Global Oil Trade Could Be Impacted by Attacks on Iran

Following coordinated military strikes by Israel and the United States on Iran, fears of a significant disruption to Middle Eastern oil supplies have heightened, with some arguing that extreme outcomes may push the global economy into recession. 

Iran, a member of the Organization of the Petroleum Exporting Countries since its inception more than six decades ago, ranks as the 4th biggest producer of oil globally. At the start of this year, the Middle-Eastern country was producing slightly above 3 million barrels of oil per day.  

For years, energy markets have largely discounted the possibility of a serious supply interruption in the region. However, former White House energy adviser and current head of Rapidan Energy Bob McNally, warns that traders may be underestimating the risks posed by potential Iranian retaliation. According to McNally, oil futures could jump by about $7 per barrel when markets reopen, reflecting a reassessment of geopolitical risk. 

Latest figures show that on Friday, U.S. West Texas Intermediate closed at $67.02, representing a 2.78% surge in prices while Brent crude settled at $72.48 per barrel, representing a 2.45% increase. 

Some believe Iran could attempt to pressure President Trump by threatening commercial shipping through the Strait of Hormuz. The strait is regarded the most critical maritime passage for global oil transportation. In 2025, over 14 million barrels of oil passed through the strait every day, accounting for roughly one-third of global seaborne crude exports. 

Around 75% of these shipments were destined for major Asian economies, including South Korea, China, Japan, and India. China alone relies on the strait for approximately half of its imported crude supply. This means that any action that renders the passage unsafe could drive oil prices beyond $100 per barrel and guarantee global recession. 

In his statement, McNally noted that Tehran possessed substantial inventories of naval mines and short-range missiles capable of severely disrupting tanker movements, a risk markets may not fully appreciate. 

Recent figures show that on Friday, over 20 million barrels of crude were loaded for export from producers like Qatar, Kuwait, Saudi Arabia, the United Arab Emirates, and Iraq. This comes as reports show that some vessels have altered their routes to avoid passing through the strait. 

In the event of a closure, most of the world’s spare oil production capacity would be prevented from reaching global markets. This includes roughly 20% of global liquefied natural gas exports which transit the strait and would be difficult to replace elsewhere. McNally posits that such a scenario could spark widespread stockpiling, particularly among Asian importers, as nations compete aggressively for limited supplies. This, he argued, could potentially create intense bidding wars in energy markets. 

The U.S.-led attacks on Iran and their potential for disruption of global oil markets make a strong case for countries to invest in domestically sourced energy alternatives like geologic hydrogen. As geopolitical tensions rise, companies like Max Power Mining Corp. (CSE: MAXX) (OTC: MAXXF) could see increasing investor interest in natural hydrogen that can address the energy needs of markets looking to move away from overreliance on imported oil. 

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