Global shock waves: The widening impact of the US, Israel – Iran war

The escalating confrontations between the US, Israel and Iran have triggered a severe shock to the global energy supplies. The war has disrupted key trade routes, such as the Strait of Hormuz, which on a normal day handles roughly 130 ships, but ships are now advised not to use it.
Along with the closure of the Strait, the OPEC+ production cuts have driven oil prices to soar and financial markets to plummet.
After the US-Israel strikes on Iran, significant parts of the Middle East airspace were closed or restricted. According to Al Jazeera, 37,000 flights were cancelled and over 4 million passengers were affected in what a BBC interview described as the largest aviation disruption since the Covid-19 pandemic. UK airports alone saw roughly 42 flight cancellations and 146 delays in a single day.
Dubai International Airport has been the world’s busiest international airport for a decade, handling 95.2 million passengers in 2025. It connects 272-291 destinations in more than 100 countries and is served by 100 international airlines. It has steadily grown into the world's most connected network. The current war underscores how central the Middle East has become in upholding equilibrium in energy (oil & gas) supply and the aviation system.
The Middle East region is home to many countries, such as Saudi Arabia, the United Arab Emirates, Iraq, Qatar, Kuwait, Bahrain, Oman and Iran (Sanctioned and constrained), which remain the region's largest oil exporters.
The region shipped 15 million barrels per day in 2023. According to the study, in 2022, the Gulf region exported 22 million barrels of oil per day and in 2024, it accounted for approximately 80% of crude oil and 20% of refined products. Almost 1/3 of the world's oil is produced in the Middle East and 1/5 of global oil consumption moves through the Strait of Hormuz.
Gulf’s major oil and gas exporters are led by Saudi Arabia, the UAE, Kuwait, Iraq, Qatar and Oman, which ship most of their crude and LNG to Asian buyers such as China, India, Japan, South Korea and other Asian economies, with smaller but still important flows to Europe and, to a lesser extent, North America.
Iran, constrained by sanctions, sells discounted barrels largely to China via indirect routes. At the same time, Bahrain and the UAE also play significant roles in the trade of refined products and petrochemicals to Asia, Europe and regional markets. Overall, Asia absorbs the bulk of Gulf energy exports, Europe relies on them as a key diversification source and China has emerged as the single most important customer for Middle Eastern oil. South Asian countries such as the Philippines, Thailand, Malaysia, Brunei and Vietnam import 60 to 80 per cent of their crude oil.
The state of flux created by the war and the heightened threat of strikes has halted tanker traffic through the Strait of Hormuz. This strait is a crucial maritime chokepoint for roughly 20% of global oil and gas flows.
Brent and US crude futures have jumped by around 6–8% in recent sessions amidst concerns about prolonged supply disruptions. OPEC+ (including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, etc.) is already keeping about 3.66 million barrels per day of supply off the market through coordinated cuts, further tightening supply.
Recent tanker strikes have raised insurance costs and freight rates; and rerouting around risky areas has also increased, adding a ‘logistics premium’ to oil and fuel prices. For example, Qatar Energy, one of the world’s largest LNG exporters, temporarily halted production after military attacks on its facilities, leading to a sharp rise in gas prices and further heightening overall energy market anxiety.
The Middle East conflict and risks associated with the Strait of Hormuz have a direct impact on India. India's LPG production accounts for only 40 to 45 per cent of domestic demand; the remaining 60 to 65 per cent is imported. 90 per cent of LPG imports come from the Middle East, mostly from Qatar, Saudi Arabia, the UAE and Kuwait. LPG is a household necessity.
The government has prioritised and rationed LPG for household consumption, hospital care and school services. If the war continues to intensify and disrupt energy and gas supplies, the LPG shortage could escalate, affecting non-domestic consumption, such as restaurants, hotels and certain industries. Pakistan and Bangladesh are also exposed to LPG shortages, as they import 90 per cent and 70 per cent of their LPG from Qatar.
As the war in West Asia continues, the spillovers and collateral damage are widening. Rather than debating and discussing how long the war will last, policymakers and national leaders should confront the reality that every additional day of the fighting inflicts physical, financial, economic and psychological harm across the world.
The Middle East is now central to global peace and sustainability; and it must be negotiated through the collective efforts of world leaders, not through complacent crisis management from the sidelines.