President Donald Trump stated on Monday that the conflict in Iran would conclude “very soon,” adding that oil tankers would receive special escorts from the U.S. Navy to travel between the Persian Gulf and international waters. According to the world’s biggest oil and gas firm, the rapid restart of global oil trade is now an urgent priority for the world economy, as fuel prices and energy inflation are already rising globally.
The escalating Middle East conflict has virtually halted the region’s fossil fuel trade for the last ten days. Assaults on ships and energy infrastructure have deterred most exporters from using the Strait of Hormuz, removing as much as 20% of traded oil from world markets.
Trump indicated the war involving the U.S., Israel, and Iran could end shortly after a discussion with Russian President Vladimir Putin, calling it a “very good call” and stating Putin wished to assist in ending the hostilities. He informed reporters the military operation was advancing quickly, terming it a “short-term excursion,” and reiterated that the war might be over “very soon.”
Nevertheless, later that day, he adopted a more guarded stance, telling Republican legislators the battle was not over and pledging continued U.S. military pressure until Iran’s leadership and military power were completely subdued. The contradictory signals highlighted uncertainty over the war’s duration, even as financial markets responded to his earlier hint that it might be winding down.
Global energy markets reel
The potential for an extended shutdown of the Strait has emerged as a clear danger in recent days, prompting concerns about how world energy markets and economies would manage.
“The longer the disruption persists, the more catastrophic the consequences for the world’s oil and markets, and the more severe the impact on the global economy,” said Amin Nasser, CEO of Saudi Aramco, during the firm’s quarterly earnings call on Tuesday.
Aramco is Saudi Arabia’s majority state-owned oil and gas company and the planet’s largest producer of fossil fuels. The firm, like all Gulf exporters, has been severely impacted by the Strait’s closure. On Monday, Aramco started reducing output at several oil fields to avoid hitting storage limits, following similar moves by producers in Iraq, Kuwait, and the United Arab Emirates.
Oil prices have experienced extreme volatility over the past week. The global Brent crude benchmark jumped above $100 a barrel over the weekend amid growing fears of a prolonged Middle East conflict, touching $120 on Monday, a peak not seen since 2022. Prices fell sharply on Tuesday following Trump’s remarks promising a quick end to the war, settling around $90 a barrel.
However, some harm is already evident. In the United States, the national average price for gasoline reached $3.59 on Tuesday, up from $2.92 a month ago, AAA data shows.
A further shift in the story regarding the conflict’s length could also be expensive. Nasser pointed out that worldwide oil stockpiles are already at a five-year low, so extended production halts would speed up the depletion of reserves and leave consuming countries with a smaller cushion against future disruptions.
Workarounds are temporary, and risk remains
On Monday, finance chiefs from the G7 nations—the U.S., U.K., Canada, Germany, Italy, France, and Japan—declared they would implement “necessary measures” to bolster global energy supply, which could include a coordinated release from emergency oil reserves. The International Energy Agency, a group of 32 mostly industrialized countries, estimates its members hold about 1.2 billion barrels in emergency stocks and said Tuesday it was calling a special meeting to consider deploying them.
Nasser stated that Aramco has fulfilled most customer obligations so far by accessing crude stored outside the Gulf and diverting some shipments, estimating the company can still export roughly 70% of its normal crude production. Most alternative shipping routes utilize a pipeline linking facilities on Saudi Arabia’s eastern coast with Yanbu, a Red Sea port city where oil can be processed and exported in reduced quantities.
But Nasser emphasized these contingency measures are short-term and cannot substitute for fully reopening the region’s primary export channel. Risks of additional damage to energy infrastructure also persist, exemplified by last week’s alleged Iranian drone strike on Aramco’s Ras Tanura facility.
If the conflict does pause and the Strait of Hormuz reopens, Aramco could restart its worldwide shipments “in a matter of days,” Nasser said. However, this depends on the company’s inventories remaining ample, which will not hold true if Trump’s forecast of a rapid end to the fighting proves incorrect.
On Tuesday, the United States intensified its strikes on the Iranian regime in what Defense Secretary Pete Hegseth described as the “most intense” day of the campaign. In response, Iran’s Revolutionary Guard said Tuesday it would not allow “one liter of oil” to exit the Middle East if U.S. attacks persist, according to a Reuters report.
With his remarks, Nasser added his voice to other oil and gas leaders warning about the conflict’s threats to the global economy. Last week, Qatar’s energy minister cautioned that the war could “bring down the economies of the world” if the Strait stays closed for an extended period.
“While we have faced disruptions in the past, this one by far is the biggest crisis the region’s oil and gas industry has faced,” Nasser said.