Traffic through the narrow waterway of the Strait of Hormuz has collapsed in recent days as Iranian missile and drone attacks targeted Gulf energy infrastructure and commercial vessels.
At least two Iranian ballistic missiles struck Bahrain’s BAPCO refinery near Ma’ameer on 5 March, triggering a fire at the facility, while other attacks hit areas near Doha and damaged tankers across the Arabian Gulf.
The disruption has been swift and severe. Tanker traffic through the Strait of Hormuz has fallen to roughly 10–15% of its normal volume, while war risk insurance premiums for vessels operating in the Gulf have surged more than tenfold. Several major shipping companies have suspended operations through the strait altogether.
Energy production across the region is also beginning to falter. Iranian strikes have directly affected the Gulf’s energy infrastructure. On 2 March, Saudi Aramco temporarily halted operations at units within the Ras Tanura refinery, the kingdom’s largest facility, with a capacity of around 550,000 barrels per day, following drone-related damage.
The same day, QatarEnergy suspended liquefied natural gas production at its Ras Laffan and Mesaieed complexes, the world’s largest LNG export hub.
The immediate market reaction was significant. Brent crude jumped as much as 13% intraday to above $82 per barrel, while European natural gas prices surged more than 25% and Asian LNG benchmark prices climbed nearly 40%.
With roughly 14 million barrels per day of crude oil, about four million barrels per day of refined products, and nearly one-fifth of global LNG normally passing through the Strait of Hormuz, even limited instability in the waterway now threatens to trigger a far broader economic shock. The military struggle for Hormuz While the United States and its allies have inflicted significant damage on Iran’s conventional naval capabilities , Tehran continues to demonstrate that it does not need a traditional blockade to disrupt global shipping. Satellite imagery indicates that repeated strikes have targeted Iran’s naval infrastructure at Bandar Abbas, the country’s main military port on the Strait of Hormuz. Facilities belonging to both the Islamic Revolutionary Guard Corps Navy (IRGCN) and the regular Iranian navy have been damaged, including drone storage sites and submarine repair docks.
US Central Command has confirmed strikes on Iranian submarines and naval vessels in the opening phase of the campaign, while commercial imagery suggests significant damage to key military facilities at the port.
Despite these setbacks, Iranian forces have continued to attack shipping in the Gulf using asymmetric tactics. Between 28 February and 6 March, at least eight to ten commercial vessels were reported damaged or struck by drones, missiles, or explosive surface craft across the Strait of Hormuz, the Gulf of Oman, and the surrounding waters of the Arabian Gulf.
Maritime security advisories issued by the United Kingdom Maritime Trade Operations (UKMTO) describe multiple incidents involving cargo ships and oil tankers near Oman, the UAE, and Kuwait.
Rather than attempting to seal the strait outright - a difficult task even for a powerful navy - Iran appears to be pursuing a strategy of disruption . The attacks have ranged from missile and drone strikes to the use of unmanned surface vessels capable of breaching a ship’s hull, forcing several crews to abandon their vessels and prompting insurers and shipping companies to reassess the risks of operating in the region.
Karen Young, a senior fellow at the Middle East Institute, told The New Arab that the duration of the conflict and Iran’s ability to sustain such attacks are now the key variables shaping market reactions.
“The first question concerns how long this conflict lasts and how it limits the volume of oil and gas moving through the Strait of Hormuz,” Young said. But even if hostilities ease, uncertainty will remain.
“No one really knows what remains afterwards - what kind of governance arrangement would be acceptable to Washington and the Gulf states,” she added.
This ambiguity itself has become a market driver, as traders attempt to assess whether disruptions are temporary or could persist for weeks. Energy markets brace for a global shock The military confrontation around the Strait of Hormuz is rapidly translating into a shock for global energy markets. Iranian strikes on Gulf energy infrastructure have already begun to disrupt production across the region.
QatarEnergy halted LNG production after attacks on facilities near Ras Laffan, forcing the company to declare force majeure on some shipments. The suspension affects a system that normally accounts for around 75 million tonnes of LNG annually - roughly 20% of global supply.
According to Kate Dourian, contributing editor at MEES, a specialist publication analysing energy, oil, gas, and geopolitical developments, the immediate market response has been significant but not yet catastrophic.
“So far the market has been quite sanguine despite the closure of Hormuz and the shutdown of some oil fields,” she told The New Arab . Even so, the scale of disrupted energy flows is enormous. “Some 19.5 million barrels per day of oil are currently stranded outside the chokepoint, and there are zero LNG exports through Gulf ports,” Dourian said. Oil prices have climbed steadily since the conflict began, while natural gas markets have reacted far more sharply. Asian LNG spot prices have more than doubled to over $25 per million British thermal units, compared with around $10 before the war. European benchmark TTF gas prices have also surged above €54 per megawatt-hour.
The deeper concern for traders is not simply infrastructure damage but the effective closure of Hormuz itself. Normally, around 14 million barrels per day of crude oil and roughly four million barrels per day of refined products pass through the strait, making it one of the most important energy corridors in the world.
If tanker traffic remains severely constrained, the consequences could be severe. Iraq has already curtailed production at the giant Rumaila oil field due to storage constraints, and analysts warn that several Gulf producers could face similar problems within weeks.
“Iraq has been the most impacted and is the first of the major producers to shut down oil fields as storage capacity is limited,” Dourian said. On 6 March, Kuwait also began cutting production at several oil fields after running out of storage capacity for its bottled-up crude.
Pipeline alternatives offer only limited relief. Saudi Arabia can export crude through its East-West pipeline to the Red Sea port of Yanbu, while the UAE can bypass Hormuz through the Fujairah pipeline. But even combined, these routes handle only a fraction of Gulf export volumes.
“Pipeline capacity constraints mean producers cannot export full volumes,” Dourian noted. Meanwhile, the shutdown of LNG production in Qatar is already having a ripple effect across global energy markets. “The gas market has been the most impacted due to the loss of Qatari LNG, and prices have soared,” she said.
Qatar’s Ras Laffan facility alone accounts for roughly 17% of global LNG exports, meaning prolonged disruption could send shockwaves through both Asian and European gas markets. Asia's energy lifeline at risk Nowhere are the implications of a prolonged Hormuz disruption more acute than in Asia, which depends heavily on Gulf energy exports. China, the world’s largest importer of crude oil, relies extensively on supplies from the Gulf, particularly from Saudi Arabia.
Japan, South Korea and India are similarly dependent on Gulf crude and liquefied natural gas shipments that normally pass through the narrow waterway connecting the Gulf to the Arabian Sea.
According to Ahmed Aboudouh, associate fellow at Chatham House and head of the China program at EPC, Beijing has taken steps to mitigate the immediate impact. “China has been increasing its strategic reserves for quite some time,” Aboudouh explained to TNA .
In 2025 alone, China purchased roughly 430,000 additional barrels per day of crude oil, storing roughly 83% of those volumes in strategic reserves. In the short term, those reserves could help cushion supply disruptions. “March and April shipments have already been paid for, so China will not face immediate disruptions,” Aboudouh said. But longer-term vulnerabilities remain significant.
Iran exported around 1.4 million barrels per day of crude oil to China in 2025, most of it sold at a discount to independent “teapot” refineries. “These discounts are existential for many of these refineries,” Aboudouh noted. If Iranian supplies were disrupted, Chinese refiners would be forced to purchase crude at much higher market prices.
Even if China manages to replace lost supplies, energy market risks will likely remain elevated. “Insurance companies and shipping firms will remain reluctant to send tankers through Hormuz for some time,” Aboudouh said. The crisis is also reinforcing broader debates inside Beijing about energy security.
“Chinese policymakers are asking whether it is wise to rely on the Middle East for around 45–46% of imported energy,” he added. In the longer term, indeed, China is likely to accelerate electrification and diversify supply sources while maintaining large strategic reserves.
For now, however, the Strait of Hormuz remains the single most important artery linking Gulf energy exporters with Asian markets, meaning that even partial disruption could reverberate across global energy markets and trade for months. Francesco Salesio Schiavi is an Italian specialist in the Middle East. His focus lies in the security architecture of the Levant and the Gulf, with a particular emphasis on Iraq, Iran, and the Arab Peninsula, as well as military and diplomatic interventions by international actors Follow him on X: @frencio_schiavi Edited by Charlie Hoyle