The United States is rapidly exhausting its ability to stabilise global oil markets as the ongoing war involving Iran continues to disrupt supplies, raising concerns about a potential global economic slowdown.
With the conflict entering its third week, the closure of the Strait of Hormuz has effectively blocked a significant share of Middle Eastern oil from reaching global markets. Estimates suggest that around 15 per cent of global supply remains stranded, creating an unprecedented disruption in the modern energy era.
The supply shock has already driven crude prices above $100 per barrel, while refined fuels such as diesel and jet fuel have seen even sharper increases due to fears of prolonged shortages.
Efforts to reroute oil exports have offered only limited relief. Saudi Arabia is diverting millions of barrels per day through alternative routes, while the United Arab Emirates is using its Fujairah terminal to bypass the strait. However, a substantial volume of oil remains unable to reach international buyers.
Washington has deployed several measures to ease the pressure, including releasing oil from strategic reserves and allowing limited flexibility in sanctions on Russian crude. The International Energy Agency has also coordinated a record release of emergency stockpiles among member countries.
Despite these steps, analysts warn that the available tools are becoming increasingly limited. The US Strategic Petroleum Reserve has already been heavily drawn down, leaving less room for further intervention. Other measures under consideration, such as easing shipping restrictions or adjusting fuel regulations, are expected to have only marginal impact.
The growing imbalance between supply and demand is beginning to affect consumption patterns, particularly in Asia, which depends heavily on Middle Eastern oil. Several countries are already taking steps such as reducing fuel use and cutting refinery output to cope with the tightening supply.
As uncertainty persists over when the Strait of Hormuz will reopen, pressure on global energy markets is expected to intensify, with rising prices likely to weigh on economic growth worldwide.
