The Middle East is in the midst of a war that has triggered one of the most critical energy crises in history. The US and Israeli air strikes against Iran, which began on February 28th, are still ongoing after more than four weeks. With missile barrages, attacks on energy facilities, and the de facto blockade of the Strait of Hormuz, the region has become an arena that is profoundly shaking not only the military but also the global economy. From a neutral perspective, both sides defend their own narratives: Washington and Tel Aviv say "strategic goals have been achieved," while Tehran emphasizes "legitimate self-defense against violations of sovereignty." Here are the latest developments and their impact on oil, natural gas, inflation, and the economy…

Ceasefire Offer and Rejection
On the 25th day of the war (March 24-25), Iran unequivocally rejected a 15-point ceasefire offer conveyed by the US through Pakistan. The proposal included elements such as easing sanctions, a rollback on the nuclear program, International Atomic Energy Agency (IAEA) oversight, missile restrictions, and safe navigation in the Strait of Hormuz. The Tehran administration, however, stated that "it is illogical to negotiate with a party that violates agreements," demanding an immediate end to the attacks and assurances that they would not be repeated. US President Trump announced that talks were ongoing and that they had given a deadline of March 27th. This rejection postponed hopes for a short-term de-escalation of tensions. Iran's missile and drone attacks on Israel and Gulf states (particularly Qatar and the UAE), along with Israel-US attacks on Iranian nuclear facilities (including Natanz), military bases, and the South Pars gas field on March 18th, have brought the conflict to the energy infrastructure.

The Strait of Hormuz – a critical narrow passage through which 20% of the world's oil trade and a significant portion of liquefied natural gas (LNG) exports pass – is effectively partially closed. This is being described as the biggest oil supply shock in history.
Shockwave in Oil and Gas Prices
From the first days of the war, energy markets went on alert. Brent crude oil rose 30-60% from its levels at the end of February, briefly exceeding the $120/barrel threshold. As of March 23-24, Brent was trading at around $101-102/barrel; WTI showed similar momentum. This increase is due not only to the blockage in the Strait of Hormuz, but also to Iran's retaliatory attacks on the giant South Pars gas field and Qatar's Ras Laffan LNG facility.

The picture is even sharper on the natural gas side: In Europe, the price of Dutch TTF gas has doubled since the beginning of the war, with daily jumps of up to 35% on some days. LNG prices have similarly climbed. Experts say that repairing the damage to South Pars (the world's largest gas field) could take years and will put pressure on global LNG supply for a long time. The result? Energy importers from Asia to Europe are on alert; in some countries, factories, schools, and public buildings are being shut down to conserve energy.

Inflation and its Economic Implications: A Global Domino Effect
Rising energy costs are opening the door to inflation. According to a warning from International Monetary Fund (IMF) President Kristalina Georgieva, a sustained 10% increase in oil prices could raise global inflation by 0.4 percentage points and slow world growth by 0.1-0.2 percentage points. Goldman Sachs, in a scenario of $100/barrel oil, forecasts a 0.4 percentage point contraction in global growth and a 0.7 percentage point jump in inflation. Asian countries (China, India, Japan, South Korea) are taking the hardest hit; the region imports 75% of Gulf oil and gas. Increases in food, transportation, and production costs are increasing the risk of stagflation (high inflation + recession) in some already fragile economies.

Globally:
- Transportation and logistics costs have skyrocketed; Insurance premiums and freight charges are hitting record highs.
- Food security is under threat: Imported food prices in the Gulf countries have increased by 40-120%.
- Central banks are in a dilemma: Should they raise interest rates to curb inflation or ease monetary policy to protect growth?
- Regionally, the Gulf Cooperation Council countries have also been hit from within; attacks on desalination plants have deepened the water crisis.

Analysts say that if the conflict continues, a scenario similar to the energy crisis of the 1970s (supply shortages, currency fluctuations, stagflation) is on the horizon. Although there are short-term signs of relief (Trump's "victory" statements or mediation efforts), Iran's denial and reciprocal retaliations are fueling uncertainty.

What Will Happen? Behind the Scenes of Uncertainty
On this new chessboard of the Middle East, every move reverberates from oil barrels to kitchen tables. While the military dimension of the war still rages, there are no winners on the economic front; only the number of losers is increasing. Fluctuations in oil and gas prices, inflationary pressures, and slowing growth have overturned global economic forecasts for 2026. Experts predict that if a diplomatic solution is not found, this shock wave will last for months, perhaps years. A process to watch closely… Because the winds in the Middle East can turn into economic storms all over the world. Developments closely affect both energy markets and household budgets.
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