Six Months Into Iran Conflict, Over 43% of Global Oil Output at Risk
Conflicts affecting major producers have cut into global oil supply and refining capacity, driving up fuel prices and inflation.
Six months after the outbreak of war between Iran and a US-Israeli coalition, the world is grappling with the most severe oil supply disruption ever recorded. New calculations based on International Energy Agency data reveal that nations embroiled in conflict produced roughly 45 million barrels per day in 2025, accounting for more than 43% of the world's total output.
The crisis is not confined to the Middle East. The ongoing Russia-Ukraine war has forced production cuts and damaged refining infrastructure, with impacts felt as far as Kazakhstan. Concurrent strife in Libya and US restrictions on Venezuelan exports have compounded the strain on global markets.
Analysts estimate that current Gulf disruptions alone have removed between 5 million and 7 million barrels per day from the market, even with Saudi Arabia rerouting supplies and some exporters finding covert ways to bypass the Strait of Hormuz. The risk of further escalation remains high, as demonstrated by attacks near Egypt's Suez Canal in July.
The combined effect of these conflicts has taken more than 10% of global refining capacity offline. Ukraine's strikes have crippled much of Russia's refining network, hitting plants as far as 2,700 kilometers from Ukrainian-held territory. Russia, facing domestic fuel shortages, has banned gasoline and diesel exports, further tightening global supplies.
These disruptions have driven fuel prices to record highs, becoming a primary driver of inflation worldwide. The resulting higher borrowing costs have contributed to pushing US government debt to an unprecedented $40 trillion. American diesel prices have soared to all-time peaks despite refineries operating at maximum capacity.
Emergency stockpile releases by the International Energy Agency have helped cushion the initial shock, but these measures are now largely exhausted. With global inventories continuing to dwindle, the world's reliance on US oil has grown, though even that supply remains vulnerable to severe weather events.