One Fifth of the World's Oil Just Became a War Zone

The Strait of Hormuz is 21 miles wide at its narrowest point. Thirteen million barrels of crude oil pass through it every day. That's 31% of all seaborne crude on Earth.

On Saturday, both countries on either side of it started shooting.

The chokepoint problem

Venezuela was a production story. Iran is a chokepoint story.

When the U.S. captured Maduro in January, markets barely flinched. Venezuela pumps 800,000 barrels a day of heavy sour crude that only specific refineries can process. Annoying, not catastrophic.

Iran is different. Not because of what Iran produces — roughly 3.2 million barrels per day — but because of what flows past it. Saudi Arabia, Iraq, Kuwait, the UAE, and Qatar all ship their oil through the Strait of Hormuz. Together, that's about 20% of global petroleum consumption.

Iran's navy told ships to avoid the strait on Saturday. Sea vessels reported receiving closure notices. The world's most important oil corridor went from trade route to conflict zone in hours.

Markets can't trade, but they're already moving

Here's the cruel timing: the strikes happened on a Saturday. Markets are closed. Everyone knows what's coming on Monday, and nobody can do anything about it.

Brent crude sat at $70 a barrel heading into the weekend — its highest since August 2025. Analysts are forecasting a $10 to $20 jump when trading opens. Some see $80. Others see higher.

"This has definitely bigger ramifications than Venezuela," said Florian Weidinger, CIO at Santa Lucia Asset Management.

Alicia García-Herrero, chief economist for Asia-Pacific at Natixis, expects a "rough and risk-off" Monday open. Global equities down 1-2%. Treasury yields falling 5-10 basis points. Gold surging.

But the real question isn't Monday. It's Tuesday, Wednesday, and the weeks after.

The June precedent — and why this time is worse

In June 2025, Israel struck Iranian nuclear sites. Markets sold off at the open, then recovered once it became clear the Strait wasn't disrupted. The conflict lasted 12 days.

"That is the pattern markets will reference on Monday," said Kenneth Goh of UOB Kay Hian in Singapore.

But June was a targeted Israeli strike. This is a joint U.S.-Israeli operation with regime change rhetoric. Trump called it "major combat operations." Netanyahu told Iranians to "take their fate into their own hands." The scale is categorically different.

And Iran didn't just hit back at Israel this time. It hit Qatar, Bahrain, Kuwait, the UAE, Saudi Arabia, Jordan, and Iraq. A drone struck a tower block in Bahrain's capital Manama. Another hit Kuwait's international airport, injuring airport workers. Explosions targeted Al Udeid air base in Qatar — the largest American military installation in the Middle East.

The Gulf states that host U.S. bases now have Iranian missile craters on their soil. They didn't ask for this war. They explicitly refused to let the U.S. use their airspace for the strikes. Iran targeted them anyway.

850 flights. 90,000 passengers. One day.

Eight countries closed their airspace on Saturday: Israel, Iran, Iraq, Qatar, Kuwait, Bahrain, Syria, and parts of the UAE. Oman's Muscat airport shut down entirely.

Dubai International — the world's busiest airport for international flights — cancelled over 1,000 inbound and outbound flights combined with Abu Dhabi's Zayed International. Emirates, Qatar Airways, Etihad, Flydubai, Gulf Air, and Kuwait Airways together scrapped at least 850 flights.

Cirium, the aviation analytics firm, estimates 90,000 people change flights daily in Dubai, Doha, and Abu Dhabi on just three airlines. Tens of thousands of travelers worldwide were stranded.

Planes already in the air got diverted to Athens, Istanbul, and Rome. Others turned back to their departure airports. Turkish Airlines suspended all flights to Lebanon, Syria, Iraq, Iran, and Jordan until Monday. Air India pulled out of the Middle East entirely.

India's civil aviation agency designated the entire Middle East a high-security risk zone at all altitudes.

"For travelers, there's no way to sugarcoat this," said airline analyst Henry Harteveldt. "You should prepare for delays or cancellations for the next few days."

The June strikes disrupted flights for 12 days. This operation is larger.

OPEC+ scrambles

Reuters reported that OPEC+ is now considering a larger oil output boost to stabilize markets. The cartel paused production increases from January to March due to seasonal weakness. They'd raised output by 2.9 million barrels per day through 2025.

But spare capacity has limits. And it takes weeks to translate production decisions into actual oil reaching refineries.

The real fear isn't Iranian oil going offline. Iran produces about 3% of global supply. Markets can absorb that, especially with Saudi and UAE spare capacity.

The fear is the strait itself. Even a short disruption — mines, speedboat attacks, anti-ship missiles — would remove 20% of global supply from the market overnight. The U.S. Navy would respond fast. But "fast" in military terms still means days of chaos in energy terms.

David Roche at Quantum Strategy framed it simply: if the conflict stays short and the strait stays open, markets recover. If either condition fails, we're in the biggest oil crisis in decades.

What Monday looks like

Gold up. Dollar up. Yen up. Equities down. Oil up sharply. Bonds bid.

That's the consensus. The disagreement is on magnitude and duration.

Short campaign, strait untouched: oil spikes $5-10, markets dip, recovery within a week. This is what happened in June 2025.

Extended conflict, strait disrupted: oil could hit $90-100. Global recession risks spike. Every country that imports oil — which is most of them — feels it at the pump within weeks.

The wildcard: Iran's leadership. Netanyahu claims "growing signs" that Khamenei is dead. Iran's foreign minister says he's alive "as far as I know." If the regime is decapitated, does Iran escalate harder or collapse inward?

Nobody knows. And markets hate not knowing.

The numbers that matter

• 13 million barrels per day through the Strait of Hormuz
• 20% of global oil consumption transits there
• $70/barrel Brent crude heading into the weekend
• 850+ flights cancelled Saturday across the Middle East
• 1,000+ flights cancelled at Dubai and Abu Dhabi airports alone
• 90,000 passengers change flights daily through Dubai, Doha, Abu Dhabi
• 8 countries closed airspace
• $10-20 predicted oil price jump on Monday
• 12 days: how long the June 2025 strikes disrupted flights

One narrow strait. Two warring nations on either side. Twenty percent of the world's oil in between.

The math hasn't been this dangerous since the 1980s Tanker War. Back then, Iran and Iraq spent eight years shooting at each other across these same waters. Oil prices doubled.

This time, the weapons are faster and the global economy is more connected. Every barrel that doesn't transit the strait ripples through gas stations in Ohio, factories in Guangzhou, and heating bills in Berlin.

The strait is 21 miles wide. The margin for error is zero.