The fighting involving Iran took a dangerous turn this week when both Israel and Iran struck oil and gas production and export sites. Those attacks have sharply raised the risk to global energy and commodity markets. The International Energy Agency urged people to conserve energy by working from home when possible, slowing down on the road, and using gas stoves less to help blunt price shocks.

What happened

Early strikes effectively shut the Strait of Hormuz, a crucial shipping route for oil and gas from the Gulf. That closure immediately pushed crude above $100 a barrel for the first time since 2022. In recent days, the strikes shifted from shipping to infrastructure. Israel hit several facilities, most notably the South Pars gas field, which is shared between Iran and Qatar. Iran responded with counterstrikes that included damage to the worlds largest liquefied natural gas export facility in Qatar. Oil briefly neared $120 a barrel after those events.

Qatar supplies about 20 percent of global LNG. The head of the state energy company said the strikes removed roughly 17 percent of Qatar's LNG capacity for the next five years and that the country may have to declare force majeure on some contracts in Europe and Asia.

Why this matters

Analysts say there is a real risk that damage to production and export infrastructure will last long after the fighting stops. If that happens, the loss of supply will not be quickly reversible and could keep prices elevated for a sustained period.

The head of the International Energy Agency warned that this conflict is the greatest threat to global energy supply in history, and said markets may be underestimating the impact. One market researcher noted the scale of potential supply losses is comparable to the drop in demand seen during the global shutdown in 2020. He warned that the economic outcome could be more than a standard recession and compared the scale to the pandemic demand shock.

How this reaches everyday life

  • Fuel prices: The United States is not short on oil barrels right now, but Americans will feel the impact at the pump. Higher crude costs feed directly into gasoline prices.
  • Goods and groceries: Rising fuel costs increase transportation expenses, which typically translate into higher prices for grocery items and other goods.
  • Fertilizer and chemicals: The Gulf is a hub for petrochemical and fertilizer production. Supply disruptions have already pushed fertilizer prices higher at the start of the planting season.
  • Air travel: Some airlines are raising fares and cutting flights because of higher fuel bills and airspace disruptions.

Policy moves and mixed messages

Governments have started emergency measures to reduce the immediate pain on consumers. Steps include temporarily waiving the Jones Act and considering changes to sanctions on Iranian crude. Officials also made clear they are not planning a U.S. export ban.

Public messaging from the White House has been inconsistent, according to analysts, which adds to market uncertainty about how long the conflict will continue and what the endgame might be. The U.S. president publicly warned that further attacks on Qatar could provoke a large U.S. military response and included a threat against the South Pars field.

What to watch next

If strikes on energy facilities continue, the downturn in supply could be both deep and long lasting. That outcome would push prices higher and ripple across industries that rely on Gulf-produced inputs. If damage is limited and repairs proceed quickly, markets could calm. For now, volatility looks set to stay.

These events are not an academic scenario any more. Energy specialists who once used this exact situation as a classroom thought experiment are now watching it unfold in real time.