The oil market is increasingly pricing in a protracted Middle East conflict—not one measured in days or even weeks. This growing consensus is reflected in surging prices for both Brent and West Texas Intermediate (WTI) crude, which continue to climb daily.
U.S. Readiness Signals Longer-Term Tensions
Recent moves and statements suggest the United States is not preparing for a swift resolution to the Iranian threat—and cannot currently reassure shipping companies or oil producers that the Strait of Hormuz will remain open amid escalating regional tensions. A Politico report indicated that U.S. officials are bracing for military engagement potentially lasting through September, triggering widespread concern across global markets.
Businesses and industries worldwide view such a scenario as unthinkable—and economically catastrophic—given its likely impact on national budgets and energy security.
Supply Crunch Drives Unconventional Measures
In response to severe supply shortages, the White House recently granted India a one-month waiver to continue importing Russian oil—a move underscoring the urgency of securing alternative supplies. At present, Russian oil already loaded onto tankers globally serves as a de facto first line of defense against shortages, drawing strong demand despite Western sanctions. Asian importers, in particular, are scrambling to secure volumes from any available source.
Meanwhile, three days have passed since former President Donald Trump pledged immediate measures to ease high fuel prices—but no formal announcements have yet emerged from the U.S. Departments of Treasury or Energy.
Gulf Production Grinds to a Halt
Oil and gas output across Gulf states is gradually shutting down—not due to lack of capacity, but because storage facilities are full. Offshore platforms have paused production, and local refineries are cutting output as there’s nowhere to send finished products.
A telling sign: ADNOC’s subsidiary has chartered three large tankers within the Gulf for 30–90 days to serve as floating storage. Such a decision would be unlikely if the crisis were expected to resolve within days.
Qatar Warns of Soaring Prices
Qatar has warned that oil prices could surge to $150 per barrel within the next two to three weeks under current conditions—and that natural gas prices may reach €117 per MWh—three to four times current levels. In anticipation of prolonged disruption, Qatar is also leasing out some of its LNG tankers stationed outside the Persian Gulf, rather than leaving them idle.
Industry sources told Montel that U.S. LNG export terminals—already operating near full capacity—cannot quickly replace lost Qatari shipments, further highlighting the scale and duration of the emerging supply shortfall.