2026 Iran war fuel crisis

The 2026 Iran war, including the closure of the Strait of Hormuz, has led to possibly the largest ever supply disruption in the global oil market. The impacts of the conflict include acute supply shortages and rises in the cost of fuel, leading to inflation, and heightened risks of stagflation and recession. The war has precipitated a major energy crisis and subsequently economic crisis for Europe, primarily through the suspension of Qatari liquefied natural gas (LNG) and the closure of the Strait of Hormuz. The rest of the world has been affected by panic buying and severe disruption to the distribution of petroleum, much of which is sourced from the Middle East and transits the Straits of Hormuz, the latter blockaded by Iran in early March 2026. The Philippines declared a state of emergency on 24 March due to a concurrent strike by transport workers, while other countries such as Zimbabwe, Pakistan, Bangladesh, Nigeria, and Vietnam face similar predicaments with severe shortages of fuel.

The 2026 Iran war caused immediate volatility in energy markets, with Brent crude oil prices surging 10–13% to around $80–82 per barrel by 2 March 2026.^[1] The conflict has caused the restriction of nearly all traffic through the Strait of Hormuz, leading to what the International Energy Agency has characterised as the "largest supply disruption in the history of the global oil market".^[2][3] The head of the IEA described the situation caused by the war as the "greatest global energy security challenge in history".^[4]

Iran's closure of the Strait of Hormuz disrupted 20% of global oil supplies and significant liquefied natural gas (LNG) volumes.^[5][6] Analysts have forecast that prices could reach $100 per barrel if disruptions persisted, potentially adding 0.8% to global inflation.^[7]

Exports from the region have been typically going to Asian countries, with China, India, Japan, and South Korea accounting for 75% of oil and 59% of LNG exports.^[8][9] However, Singapore and Taiwan depend more on Qatari LNG, while Pakistan and Bangladesh are more price sensitive.^[10]

QatarEnergy announced on 3 March that it was declaring Force Majeure on its contracts with buyers, and internal sources, according to Reuters, said that it would soon be shutting down gas liquefication, as LNG tankers could not leave the Gulf, and that restarting it would take weeks.^[11] These announcements caused increases in world gas prices, which analysts said was a part of the Iranian Government's plan to apply pressure on the world to stop the war.^[12] On 6 March, al-Kaabi warned that if the war continues, other Gulf energy producers may be forced to halt exports and declare Force Majeure, and that "this will bring down economies of the world".^[13] Also on 6 March, it was reported that according to satellite imagery analysis by both Bloomberg and the Energy Economics and Society Research Institute in Tokyo, that Ras Laffan, the main gas facility in Qatar, appears to have not been damaged before the "unprecedented shutdown" which sent fuel prices higher.^[14] The United States, buffered by domestic production, faced less direct impact but saw gasoline prices rise 5-10 cents per gallon daily.^[15] The British think tank The Food Policy Institute has warned of long-term increases in food prices due to disruption in fuel and fertilizer markets.^[16]

On 18 March, Iran hit Qatar's inactive Ras Laffan Industrial City LNG complex, causing a 17% reduction in Qatar's LNG production capacity.^[17] The damages from this attack would take 3-5 years to fix.^[18] Consequently, LNG spot prices in Asia increased by over 140 %.^[19]

The impacts of the conflict are similar to the 1970s energy crisis, including acute supply shortages, currency volatility, inflation, and heightened risks of stagflation and recession.^{[2][20][21][22]}

Countries such as Australia and India have more sufficient reserves but face challenges with panic buying.^{[23][24][25][26][27][28]} Economies most reliant on the strait for energy imports are in Asia, with Europe also viewing the strait as vital for its energy security. The initial disruption of petroleum is expected to affect Asia the most, but Europe is likely to be hit hard in the medium-to-long term, and the UK is expected to be the worst hit major economy.^[29][30]

As of 28 March, analysts fear that another hard oil crisis is unfolding that is expected to be very decisive to the global economy.^[31]

The war has precipitated a second major energy crisis and subsequently economic crisis for Europe, primarily through the suspension of Qatari liquefied natural gas (LNG) and the closure of the Strait of Hormuz.^[32][33] The conflict coincided with historically low European gas storage levels—estimated at just 30% capacity following a harsh 2025–2026 winter—causing Dutch TTF gas benchmarks to nearly double to over €60/MWh by mid-March.^[34] On 26 March, the European Commission advised its member states to fill their gas storages early to avoid price spikes later in the year.^[35]

European natural gas prices nearly doubled after, on 2 March, the Qatari Ministry of Defense announced that two Iranian drones attacked Qatari gas facilities, followed closely by an announcement from QatarEnergy that all gas production in the country has been halted. This raised concerns over energy security and fertilizer costs.^[36][37] EU natural gas prices decreased again to a less-high €48/MWh on Wednesday 4 March.^[38]

Shipping disruption contributed to volatility in UK energy markets, with analysts warning that wholesale gas price increases could raise household energy bills and expose the country's reliance on global fuel markets.^[39] The situation also renewed political debate over the role of domestic production in the North Sea, including potential reforms to the UK's Energy Profits Levy (windfall tax) on oil and gas producers and the future of investment in the sector.^[40] However, analysts noted that additional drilling in the North Sea would be unlikely to significantly reduce UK energy bills in the short term, as most oil and gas produced there is sold on international markets at global prices.^[41][42] Iran conflicts also bolstered the necessity for renewable energy, as solar and wind power can reduce vulnerability to external supply and decentralized power generation that offers greater autonomy from global energy markets. With fluctuating oil prices, renewable energy has become significantly more cost-competitive.^[43][44] Shell plc's CEO warned that Europe could face shortages of fuel by April.^[45] British supermarket Asda also warned that it was already facing shortages of fuel at their fuel stations.^[46]

In mid-March, the state governments of Victoria and Tasmania made public transport free to all users, for differing fixed time periods. On 30 March 2026 the Australian Government under Prime Minister Anthony Albanese, after a meeting of National Cabinet, announced a National Fuel Security Plan, to coordinate responses across all states and territories of Australia. The four-stage plan specifies roles and responsibilities of governments and industry partners. At this point, the country was at level two, dubbed "Keeping Australia moving", after going through a preparation and planning phase. The federal government announced the cutting of fuel excise by 50%, along with a three-month pause on road user charges for trucks.^[47]

On 12 March the New Zealand Government released six days' worth of petroleum following a global directive by the International Energy Agency to release 400 million barrels of petrol in response to supply disruptions caused by the 2026 Iran war.^[48]

On 24 March the New Zealand Government announced that about 143,000 working families with children would receive a $50 tax credit to help with rising fuel costs from 7 April. Another 14,000 families were also expected to be eligible for a lower tax credit.^[49]

On 27 March the New Zealand Government released its four-level fuel alert level system in response to fuel shortages caused by the Iran conflict. That day the country was placed on the first phase, watchful, with the public advised to use fuel cautiously.^[50]

Most governments of Pacific nations in Oceania, such as Samoa, Fiji, Vanuatu, and Papua New Guinea, had said publicly by the end of March that they have enough fuel to keep going for a few months; however, privately, some officials have expressed concerns about the future if oil deliveries to the region are halted owing to the war, and prices have gone up in all of these countries as well as Solomon Islands, Tonga, and Marshall Islands. Australian Foreign Minister Penny Wong and Minister for Pacific Island Affairs Pat Conroy have signalled their willingness to ensure that regional neighbours do not run out of fuel. The New Zealand Government is similarly doing what it can to help, particularly Polynesian nations.^[51]

The Philippines declared a state of emergency on 24 March due to a concurrent strike by transport workers,^[56]

Many African countries are suffering from the fuel crisis too. Kenya sources all of its oil from the Middle East, and Uganda only had a few weeks' worth of stock. Saudi Arabia supplies most of South Africa's fuel. Nigeria is the continent's largest oil producer, but it does not have sufficient local refineries, so buys refined product from Europe.^[57]

Algeria is one of the European Union's largest suppliers of LNG, and has entered talks with Spain and Italy, as well as fielding enquiries from other countries, including Vietnam. It could benefit economically.^[58]

Egypt relies on imported oil, so the government has introduced measures to keep fuel usage down, including the mandatory closure of retail businesses at 9pm for a month, and dimming of street lights and roadside advertisements. It has slowed down some large government projects, and increased the price of both petrol and public transport fares. Non-essential workers have been ordered to work from home one day per week.^[58]

Ghana, which has limited refining capacity, relies on imported refined products, but is supplied by a range of producers, including Russia.^[58]

Kenya is badly affected by the war, as it sources all its oil from the Middle East. There has been panic buying of petrol, but the Energy and Petroleum Regulatory Authority has maintained stability in prices for 30 days. The war has also affected some exports, with ships taking longer to reach their destination, so the Kenya Ports Authority has prioritised the export of perishable products such as tea, flowers, and avocados.^[58]

The Namibian Government reduced fuel levies by 50% for at least three months, using its National Energy Fund to stabilise prices until the end of June. Gas and oil exploration continues in the country, which expects to start producing oil by 2030.^[58]

Nigeria is a major oil producer, and its large Dangote refinery has increased production to help meet world shortages.^[58]

South Sudan has large oil reserves, but most of it is exported and it relies on imports for refined products. Because the country generates 96% of its electricity from oil, the government has started rationing electricity in the capital, Juba, and rolling power cuts are expected to continue.^[58]

Zimbabwe has announced plans to scrap some taxes on fuel imports, which rose 40% in under a month. It has increased the amount of ethanol in its petrol from 5% to 20%.^[58]

• 2026 Strait of Hormuz crisis
• Economic impact of the 2026 Iran war
• 1970s energy crisis
• 1973 oil crisis
• 1979 oil crisis
• 1980s oil glut
• 2000s energy crisis
• Global energy crisis (2021–2023)