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Why the Iran war hasn’t caused a global oil crisis — yet
The world has found ways to adapt without crude from the Strait of Hormuz. Experts say that won’t last.
Jake Bittle
Ships remain anchored in May in the Strait of Hormuz near Larak Island, Iran. Majid Saeedi / Getty Images
Published<br>Jul 21, 2026
Topic
Climate + Energy
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When the Strait of Hormuz first closed at the start of the 2026 Iran war, the world braced for the “largest energy crisis in history.” Before the conflict began, almost 20 percent of the world’s traded oil passed through the narrow waterway between the Persian Gulf and the Gulf of Oman. Iran’s blockade of the strait effectively erased 15 million barrels per day from circulation overnight.
Many experts and commentators predicted that the supply gap would have catastrophic consequences. Australia expected fuel rationing, the European airline industry warned of mass flight cancellations, and Goldman Sachs predicted widespread oil shortages. The International Monetary Fund warned of a potential global recession, and some traders worried that oil prices could hit $200 a barrel.
But a little over four months into the war, little of that has come to pass.
TimelineHow the oil market has handled the Iran war
February 28<br>The United States and Israel launch a joint military operation against Iran.
March<br>Iran retaliates and announces that it has closed the Strait of Hormuz. Benchmark oil prices rise above $100 a barrel.
The International Energy Agency announces a coordinated strategic reserve release of around 400 million barrels from more than 30 countries, including the United States.
Governments across Asia introduce energy-saving measures such as remote work mandates and restrictions on who can drive.
April<br>The United States and other countries increase domestic crude production and exports, filling the gap created by the closure of the strait.
May<br>Brent crude rises toward around $120 a barrel, its highest level on the year, as traders fear a prolonged supply disruption.
June<br>On June 17, the United States and Iran sign a ceasefire agreement. Commercial shipping resumes through the Strait of Hormuz, and benchmark oil prices fall back to about $70 per barrel.
July<br>The ceasefire breaks down. The U.S. announces a new blockade of Iranian oil and Iran announces new transit requirements for the Strait of Hormuz. Prices rise back to about $85 per barrel.
True, oil prices have gone up around the world, and there have been critical shortages of products such as cooking oil in some places, but rationing and recession have largely not arrived. Instead, a series of emergency measures have helped avoid the predicted crises: Oil exporters including the United States stepped in to fill the gap, either by drawing down strategic petroleum reserves or increasing production. Countries that were most reliant on fossil fuel imports from the Middle East took emergency conservation measures to reduce their demand.
Here’s how the world has averted the worst of the oil shock so far, and what experts say might happen next if the conflict continues to drag on.
Finding alternative sources of oil
In the months since Hormuz cut off access to Iran’s main oil supply, the world has scraped every corner to find substitute barrels of crude oil. Many countries had stockpiles of oil saved up for an emergency, and in March, the International Energy Agency coordinated a historic release of oil from those reserves. That put on the market more than 400 million barrels, enough to fill about 20 days’ worth of the supply from Hormuz.
" data-credit="David McNew / Getty Images"/>A U.S. flag flies over Marathon Petroleum Corp’s Los Angeles Refinery, one of the largest oil refineries in North America in March 2026 in Carson, California.<br>David McNew / Getty Images
In addition, oil producers around the world ramped up production to take advantage of elevated prices. The United States, Venezuela, and Norway all pumped out more crude in the first half of the year than they had in previous months, with those additional barrels going to countries that had previously relied on shipments from Iraq and Saudi Arabia. South Korea, for instance, doubled its oil imports from the United States between February and April of this year. Iraq and Saudi also routed more than 6 million barrels of oil per day through land pipelines that were operating below...