Amid rising geopolitical tensions in West Asia, the impact of conflicts on global oil markets has become a critical area of study. This research, conducted in 2025 by Arshia Khamedi and Hadi Atazadeh at the Imam Sadiq University Oil and Energy Think Tank, examines how a potential war between Iran and Israel could disrupt energy supply, affect prices, and shape market responses.
The study analyzes three scenarios: limited tensions with no physical disruption, moderate supply reduction due to sanctions or instability, and severe crises involving the Strait of Hormuz that could impact up to 25% of global oil flows. Findings indicate that short-term price fluctuations can be managed using OPEC+ spare capacity and strategic reserves, while severe crises may trigger sharp price spikes up to $130 per barrel, inflationary pressures, and global economic disruptions. Policy recommendations include coordinated use of strategic reserves, development of alternative energy sources, diversification of supply routes, and long-term investment in renewable energy to enhance the resilience and stability of global oil markets.
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