The military escalation between the United States, Israel and Iran is putting extreme pressure on energy markets. Although no major supply disruptions have been reported yet, the risks surrounding the Strait of Hormuz pose a threat to the global economy if the conflict continues.
Key figures
- 20% of global oil consumption passes through the Strait of Hormuz
- Up to USD 147/barrel: a historic level that Brent crude could exceed in the event of a prolonged disruption
A conflict limited to a few days or weeks – the most likely scenario at present – should have a limited impact.
However, if the conflict were to continue, its macroeconomic impact could be significant and go beyond the issue of energy prices.
Ruben Nizard, Head of Sector Research, Coface.
An immediate short-term effect on energy markets
The US and Israeli strikes in Iran mark a major turning point for energy markets. At the opening of trading on Monday morning, Brent jumped by more than 10%, mainly reflecting an increase in the geopolitical risk premium rather than immediate and concrete supply disruptions.
Prior to this escalation, oil markets were largely in surplus. Abundant supply, driven by non-OPEC+ producers and rapid restocking, kept prices under pressure (averaging £68 per barrel in 2025). The conflict is a game changer, reintroducing extreme uncertainty about the security of supplies.
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The Strait of Hormuz, a strategic energy chokepoint
The main risk lies in the Strait of Hormuz, through which approximately 20% of the oil consumed worldwide and nearly 30% of crude oil seaborne shipments transit. The current disruptions are already leading to higher prices.
The capacity to bypass this strait is limited and insufficient to absorb a major shock. Prolonged or repeated interruptions could plausibly push Brent into triple-digit territory, with the possibility of exceeding the February 2022 peak (122 USD/barrel) or even the 2008 record (147 USD/barrel).
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Oil: the risk of infrastructure destruction
Although Iran is not the region's leading producer, a disruption to its supply would have an immediate impact on already fragile markets. With more than 3 million barrels per day produced and nearly over 1.5 million exported — mainly to China — an interruption would force buyers, particularly in Asia, to turn to more expensive alternatives, increasing upward pressure on oil prices.
Beyond Iranian supply or a possible closure of the Strait of Hormuz, Iran could also target oil infrastructure in other Gulf countries. The impact would then depend on the extent of the damage and the duration of the disruption, in a context where OPEC+'s spare capacity — around 4 to 5 million barrels per day — remains limited and concentrated, particularly in Saudi Arabia and the UAE, where logistical trade flows could be disrupted.
Ripple effects far beyond oil
The stakes go far beyond the oil market alone. The Strait of Hormuz is also crucial for the transport of liquefied natural gas (LNG), fertilisers, industrial metals (aluminium) and petrochemicals. In addition, other strategic chokepoints, such as Bab el-Mandeb1 or the Suez Canal, could also be affected in the event of regional escalation. This could increase freight costs and shipping insurance premiums.
This gradual disruption of supply chains poses a growing risk of shortages and inflationary pressures, particularly for economies that are most dependent on energy imports.
The Effects of the Conflict in the Middle East on Romania's Economy
The escalation of the conflict has a direct inflationary effect. In December 2025, analysts at the European Central Bank stated in a study published by the ECB that a 10% increase in energy costs would have a direct impact of +0.3% on inflation, to which could be added an indirect effect of up to +0.2% if the shock persists. Even before the recent outbreak of the conflict, the National Bank of Romania had already raised its inflation forecast for this year from 3.7% to 3.9%. In addition, the sudden rise in natural gas prices, which have doubled since January 1 on European markets, poses additional major risks to price increases.
Persistent inflationary pressures reduce the room for maneuver for monetary policy relaxation and delay interest rate cuts. In this context, long-term bond yields are prone to increases, recently reaching 6.75% for 10-year bonds. This translates into higher financing costs for the Romanian state when borrowing from the markets, an effect that will have a negative impact on the cost of capital for the corporate segment.
"The conflict in the Middle East is having a strong contagion effect on the Romanian economy, with the main transmission channel being the vulnerability of the energy market. The shocks are being felt at the macroeconomic and sectoral levels, directly influencing price stability, interest rates, economic growth, and security of supply.
The tense economic environment directly affects two vital engines. Consumption is affected because increased risk aversion and high energy prices reduce consumer confidence and severely erode the purchasing power of households. Industry is also heavily impacted due to rising energy commodity costs, with warnings of the risk of a sharp decline in industrial production in the event of supply disruptions," said Bogdan Nichișoiu, Regional Enhanced Information Manager.
The impact on consumption and industry, combined with persistently high interest rates, are acting as inhibitors to medium-term growth. Romania's economy has already entered a new technical recession in the second half of 2025, and the (already modest) economic growth forecast of 1% for 2026 is already being called into question.
The long-term risk: a global macroeconomic shock
An extreme scenario of oil prices remaining above USD 100 per barrel would trigger a new surge in global inflation and would likely force central banks to reverse their strategy, moving from monetary easing to widespread tightening.
A prolonged USD 15 increase in Brent crude oil prices could thus reduce global growth by around 0.2 percentage points and add nearly 0.5 percentage points to inflation. In such a context, the risk of stagflation – a combination of weak growth and high inflation – would once again become a credible threat to the global economy, with serious consequences for businesses and international trade.
1 Strait connecting the Red Sea to the Gulf of Aden.
