The strikes by the United States and Israel against Iran and the retaliation by Iran as evidenced by reported explosions in the United Arab Emirates, Qatar, Bahrain and Kuwait, may not only have significant shock and disruption in the global oil supply and prices as well as the global economy but also risk a wider conflict across the region.

While it will certainly increase global oil prices, some have speculated that oil prices will increase by between $10 to $20 per barrel. Israel has repeatedly threatened a blockade of the Strait of Hormuz, a key pathway for oil export.

Prior to the attacks, future on Brent crude, the international pricing benchmark had increased by about 2.9 per cent to close above $72.80 on Friday while US benchmark West Texas Intermediate (WTI) crude rose by 2.8 per cent to close at above $67 by Friday. Iran ranks on the global top 10 oil producers.

According to the Monthly Oil Market Report (MOMR) of the Organisation of Petroleum Exporting Countries (OPEC), an oil cartel that Iran is a member, the country supplied in 2025, 3.257 million barrel per day; 3.200mbpd in November, 2025, 3.210mbpd in December and 3.129mbpd in January 2026.

Its crude oil is relatively easy and cheap to extract, with production costs as low as $10 (€8.46) per barrel, making it particularly profitable. But Canada and the United States have costs of $40 (€33,85) to $60 (€50.77) per barrel.

Also Saudi Arabia, Iraq, Kuwait and the United Arab Emirates have similar low production costs. China is a key consumer of Iranian oil, with more than 80 per cent of Iran’s export bound for Chinese refineries.

Tasnim, the news outlet affiliated with the Iran Revolutionary Guard Corps, or IRGC, the county’s most powerful military force had claimed that the Strait of Hormuz, a global shipping lane, has been “effectively closed.”

It also quoted IRGC as say ing: “The IRGC has warned various vessels that, due to the insecure conditions around the strait resulting from the U.S. and Israeli military aggression and Iran’s responses, passage through the strait is currently unsafe.”

President Donald Trump in an eight-minute video statement posted to social media, announcing that the US had launched military strikes on Iran said the US was undertaking a “massive and ongoing operation” to end the Iranian threat.

He also called for regime change in Tehran, adding that “It’s a very simple message, “They (Iran) will never have a nuclear weapon.” He also said the operation was to protect future Americans.