WASHINGTON — An energy expert warned during a bipartisan event Thursday that the Iran war could disrupt fuel, shipping and supply chains long after any peace deal is reached.
The bipartisan Abraham Accords Caucus event, led by Republican Texas Rep. Craig Goldman and Democratic Illinois Rep. Brad Schneider, focused on the regional and global consequences of the Strait’s closure, including how the disruption could affect markets for years. Dr. Karen Young, a senior fellow at the Middle East Institute, said the disruption is extending far beyond just crude oil, noting that jet fuel, diesel, industrial chemicals and other refined products are also being strained.
“We are experiencing the largest supply shock to energy markets, to oil markets, in history,” Young said during the discussion.
Young warned that if a peace agreement between Iran and the U.S. is reached, pre-war oil flows may not immediately return to normal due to damaged infrastructure, depleted inventories, shipping risks and the lengthy time required to demine the waterway.
“Massive damage to Middle East oil infrastructure will take months, in some cases years, to repair,” Young said, adding, “It will take the U.S. and other countries years to rebuild those stocks.”Young stated roughly 20 million barrels of crude oil and refined products normally move through the Strait of Hormuz, adding that alternative pipeline routes through Saudi Arabia and the United Arab Emirates are already running near full capacity.
Schneider connected the gas price spike to broader instability in the Middle East. “What happens in the Middle East doesn’t stay in the Middle East,” Schneider said.
The warnings come as the Trump administration has offered shifting assessments on the prospects for ending the conflict with Iran. “I think we’ll have a very good chance of making a deal again. If we don’t, we’ll go back to our old ways,” Trump told PBS News on May 6. Just a week later, Trump said the deal was “on life support.”
The war in the Middle East has strained oil markets and battered the region’s energy infrastructure. Since the start of the conflict, Gulf production has reportedly fallen by nearly 57%, according to Goldman Sachs. Nearly 80 oil production facilities in the region have been attacked or damaged, according to the International Energy Agency.
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