Iran Escalation Shakes Global Markets

The Strait of Hormuz is the world's most significant maritime oil chokepoint, with an average of 20 million barrels of oil passing through it daily, equivalent to about 20% of global petroleum consumption. Beyond crude, the blockade also halts about 20% of the world's liquefied natural gas (LNG) trade, primarily from Qatar. The closure has an immediate and severe impact on Asian economies. Over 80% of the crude oil and LNG transiting the strait is destined for countries like China, India, Japan, and South Korea. In 2025, China's crude imports reached a record 11.6 million barrels per day, with a significant portion supplied via this route. Alternative transit routes are limited and cannot compensate for the loss. The combined capacity of existing pipelines, such as Saudi Arabia's East-West pipeline, is less than 40% of the traffic that normally passes through the strait, leaving the majority of the Gulf's output stranded. Maritime insurance premiums for the Persian Gulf have surged by 50%, and major providers are issuing cancellation notices for war risk coverage. Some analysts predict that a prolonged closure could push Brent crude prices to $140 per barrel or higher, a level not seen since 2022, and potentially trigger a global recession. The joint U.S.-Israeli mission, dubbed "Operation Epic Fury," was a "massive, overwhelming attack" that had been in the planning stages for months. The initial wave involved more than 100 aircraft striking over a thousand targets in the first 24 hours. President Trump's stated goal for the operation is to prevent Iran from obtaining a nuclear weapon. The strikes killed several senior Iranian political and military officials in addition to the Supreme Leader, including the Defence Minister and Revolutionary Guards commanders. The Iranian Red Crescent Society reports at least 555 people have been killed in the operation, while U.S. Central Command has confirmed the first American combat deaths.