How could the U.S. strikes in Iran affect the world's oil supply?

"The main reason oil markets are nervous about U.S. strikes relates to how Iran might respond. The issue will be sort of what that does in the longer term and the potential spillover effects. Iran controls the Strait of Hormuz, a vital shipping route. About 20 million barrels of oil and oil products pass through every day, according to the U.S Energy Information Administration, from countries such as Saudi Arabia and Iraq. That's about 20% of global oil demand."

"Despite ongoing sanctions, Iran still is a significant oil exporter. As of December, it managed to export around 1.9 million barrels per day despite U.S. efforts to block exports, according to the International Energy Agency. Most of Iran's exported oil goes to China and is carried on so-called shadow ships, tankers that actively conceal their activities to evade sanctions or other restrictions."

"China remains fairly insulated from a disruption in Iranian oil imports. China has very large reserves, both strategic reserves and commercial reserves. You take Iran out, you're not really starving the rest of the world."

U.S. and Israeli military strikes against Iran create significant risks for oil markets and the global economy. Iran exports approximately 1.9 million barrels daily despite sanctions, primarily to China via shadow ships. While China maintains substantial strategic and commercial reserves providing insulation from Iranian supply disruptions, the primary market concern centers on Iran's potential response. Iran controls the Strait of Hormuz, through which approximately 20 million barrels of oil and products transit daily—representing roughly 20% of global oil demand. Potential Iranian closure of this vital shipping route could severely disrupt global oil supplies and trade. Crude prices have risen for weeks reflecting these supply threat concerns, though market impacts remain unclear pending trading reopening.

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