Export Delays, Rising Prices, and Other Risks Of Iran’s Oil-Shock War
Originally published on Forbes.com on March 19, 2026
A dangerous escalation of the Iran war last night will worsen the oil shock and its consequences: LNG, gasoline, diesel, fertilizer, and general inflation.
The Strait of Hormuz is a narrow neck of the seaway between Iran, to the north, and the Arab nations of the UAE, Oman, and Saudi Arabia, to the south. It’s 20 miles across, which seems a lot, but huge oil tankers need a mile or two of seaway separation to be safe. Right now, 200 tankers are at anchor, afraid to deal with the threat of missiles and mines while crossing the Strait.
Shipping giants like Maersk have halted transit through the Strait. Major exporters of oil, such as Saudi Arabia, the UAE, Kuwait, and Qatar, have been shut down through the Strait. Observers say it’s the worst disruption ever for global energy. The price of crude oil has shot up.
Oil at $100 per barrel
The WTI price of crude oil was $64/barrel in February and is today hovering about $100/barrel, an increase of more than 50%. The 52-week low and high prices were $55/barrel and $120/barrel.
LNG prices in Europe, which have helped replace Russian gas, have jumped by 50% or more due to a previous Iranian drone hit to QatarEnergy’s Ras Laffan plant, the largest LNG production facility in the world. Qatar supplies 20% of the world’s LNG.
BBC has just reported that Ras Laffan was attacked again, causing “extensive damage.” This was in response to a bizarre escalation yesterday when Israel attacked Iran’s South Pars gas field, a massive offshore field that is just about the largest in the world, which is also produced by Qatar. Gas prices also jumped by more than 25% in Thursday trading, and are double what they were before the war started.
An oil price increase of 50% is a shock, no question, but history reveals much greater oil shocks. The first oil shock of October 1973 occurred when OPEC embargoed oil exports to eight Western countries, including the U.S., UK, and Canada. The price of crude rose by 300%, from $3/barrel to $12/barrel. After adjusting for inflation, the jump was from $30 to $70 /barrel. The embargo ended in March 1974.
But in 1979, the second oil shock occurred, when the Iranian revolution led to a theocratic government, and oil shot up to almost $200/barrel. Then it dropped steadily to $80/barrel by 1985. There are learnings from previous oil shocks that are pertinent to the current situation in the Iran war, and we take a brief dive into these.
What Was Learned From the Oil Shocks of the 1970s?
The first two oil shocks led to many changes in the global economy, as well as politics. The embargo led to high inflation and stagnating oil imports for the U.S., but was compounded by a declining leverage of the “Seven Sisters” major oil corporations that had previously added market stability. Another was the decline of East Texas oilfields (the prime oil shales of West Texas and New Mexico had not been discovered yet). Lastly, there was the choice to allow the U.S. dollar to float freely in the international market.
The U.S. made plans to conserve and control oil. In 1974, President Nixon imposed a national speed limit of 55 mph to reduce the consumption of gasoline. In 1975, the Strategic Petroleum Reserve began storing crude oil for future emergencies. In 1977, the Department of Energy was created at the cabinet level. Later, Kissinger initiated the formation of the International Energy Agency.
The energy crisis led to greater interest in renewable energy, nuclear power, and domestic fossil fuels.
In 1974, Congress passed the Geothermal Energy Act and the Solar Heating and Cooling Act. When President Carter came to power, he set out to deregulate the energy industry. In 1978, Carter passed the Solar Photovoltaic Energy Research, Development, and Demonstration Act that authorized the government to push hard and accelerate solar renewables. A National Energy Act was passed in 1978, including conservation incentives and taxes, and limits on the use of oil and gas in electrical generation.
Those who experienced higher prices for oil and waited in long lines at gas stations changed the way in which people in the United States felt about energy.
Current Oil Shock
The Iran crisis in March 2026 is starting to have similar effects on people as the oil shocks had in the 1970s. Today’s oil price for WTI is about $100/bbl. While this boosts profits for oil production companies everywhere, the spinoff spike in gasoline prices in the U.S. is unwelcome. Gasoline’s average price per gallon jumped from $2.92 a month ago to $3.84 today, an increase of 32%. Diesel jumped from $3.70 to $5.07, an increase of 37%.
LNG prices in Europe are 50% higher than before the Iran war, and will stay elevated through 2027. Asia, which imports 26% of its LNG from Qatar and the UAE, will face price jumps as they search for alternative supplies. Damage to Qatar’s LNG production plant may take a long time to repair.
But the U.S. is insulated from LNG price shocks because it has abundant supplies of natural gas, and a large suite of LNG terminals that make it the biggest exporter of LNG in the world.
The blockade of the Strait of Hormuz has also pushed up fertilizer prices, which are important for American farmers. The Middle East supplies about 15% of fertilizers imported to the U.S. One farmer in Tennessee expects to pay $100,000 more for fertilizer, which amounts to a 40% jump from last year’s bill. One agricultural agent in Arkansas says fertilizer prices have gone up from $565/ton to $790/ton (a 40% jump) as a result of the Iran war. Coupled with a spike in diesel costs, this is a double blow to farmers across the U.S. in the spring seeding season.
Last, the producer price increase announced yesterday was at 3.4%, a jump from the previous monthly value of 2.7%. Growing inflation in many items will continue as long as the Iranian oil shock continues, and is uncomfortably reminiscent of the two oil shocks of the 1970s, which partly caused inflation to soar to 14% in the year of 1980.