Cascading Middle East conflicts have pushed fuel prices to records, with European gas reserves at their lowest in over a decade heading into winter.
Seven months after the United States and Israel launched airstrikes against Iran, the resulting closure of the Strait of Hormuz has grown into what analysts are calling the largest physical supply disruption in the history of global energy markets. A cascading series of conflicts across the Middle East has now pushed fuel prices to record highs, drained commercial inventories worldwide, and left Europe bracing for its second energy crisis in five years.
A Quartet of Supply Shocks
The crisis has compounded rapidly in recent weeks. Only a handful of ships now transit the Strait of Hormuz each day — a fraction of the traffic that once passed through the waterway carrying roughly one-fifth of the world’s oil. A September 10–11 drone strike from Iraqi territory disabled three pumping stations along Saudi Arabia’s East-West Pipeline, the kingdom’s only alternative export route. Though Reuters reported on September 24 that pipeline operations had partially resumed, Saudi crude and fuel shipments to Europe remain effectively paused.
Meanwhile, Houthi rebels have expanded control over the Bab al-Mandab Strait, and Russia — its refineries battered by Ukrainian drone strikes — has extended its ban on diesel exports. Francisco Blanch, global head of commodities at, described the situation as “unprecedented,” telling El País that “the disorder in the Middle East is extreme, and there is neither enough crude on the market nor, above all, enough refineries available to process it”.
Record Prices Ripple Through the Economy
US diesel hit a record of $6.52 a gallon on 22 September, whilst petrol rebounded to $4.49, according to AAA. In Europe, a full tank of diesel costs roughly 40% more than at the start of the year, with European car owners and haulage companies paying an additional 203 million euros per day compared to January, according to a European Commission analysis cited by Transport & Environment. The National Energy Assistance Directors Association has projected that American households relying on heating oil will pay 31.3% more this winter.
Chevron CEO Mike Wirth offered a blunt assessment: “I wish I could tell you that I saw some reason why things would ease, but it’s difficult right now to see that happen,” he said, as reported by The Wall Street Journal. In France, the government announced a 450-million-euro aid package this week for households and industries hit by soaring fuel costs, as rural communities face echoes of the gilets jaunes protests.
Winners, Losers, and a Looming Winter
The crisis has produced stark winners. Shell reported a threefold increase in quarterly profits, reaching $10.8 billion, whilst BP posted a 139% gain. ExxonMobil and Chevron together reported $26.6 billion in profits. Commodity trader Glencore saw earnings multiply 66-fold in just three months.
European natural gas reserves, meanwhile, sit at their lowest in more than a decade, roughly 20 percentage points below seasonal norms, after Qatar — the world’s second-largest LNG exporter — was forced to cancel most sales citing force majeure. “What we hope is that this winter, like the last, is not too cold in Europe,” said Ana Maria Jaller-Makarewicz of the Institute for Energy Economics and Financial Analysis. “Because if it is, we could have serious problems”.
Europe faces second energy crisis as Hormuz closure batters global fuel supply
