Global Energy Markets Stabilize After Iran Conflict but Risks Remain High

The global energy market is gradually recovering from a severe shock caused by an unprecedented conflict involving Iran, the United States, and Israel. At the peak of the crisis, the Strait of Hormuz, a critical passage for about one-fifth of the world’s oil supply, was effectively closed, disrupting millions of barrels per day and causing major market turmoil. Despite this, the global economy avoided a catastrophic collapse due to coordinated emergency measures.

The International Energy Agency (IEA) led a coordinated release of hundreds of millions of barrels from strategic reserves, while temporary easing of restrictions on Russian oil purchases and the activation of alternative infrastructure helped stabilize supply routes outside the Gulf region. These actions curbed the spike in oil prices, with Brent crude stabilizing around $70 per barrel. Further relief came with a June 17 interim agreement that ended hostilities and reopened the Strait of Hormuz. As part of this deal, the U.S. granted Iran a temporary license to export oil without sanctions to help stabilize the market in the short term.

However, significant uncertainties remain. Key issues such as Iran’s nuclear program, missile capabilities, and future control over the strait have been postponed to ongoing negotiations in Doha, which are described as "positive" but have yet to yield a breakthrough. Meanwhile, emergency reserves have been depleted to historically low levels, reducing the world’s ability to handle another disruption. OPEC+ plans to increase production in the coming months, but this may not be sufficient if tensions escalate again.

Experts warn that the current calm is fragile. Any failure in negotiations or renewed conflict could reignite the crisis with fewer tools available to mitigate its impact and pose a much greater risk to the global economy.