A mourner holds a portrait of Ayatollah Ali Khamenei during a funeral for a commander of the Islamic Revolutionary Guard Corps' Quds Force killed in an Israeli airstrike in Lebanon
The Middle East conflict and the oil price puzzle
An escalation in the conflict could threaten global oil supplies, so why is the market not reacting?
The continued escalation of conflict in the Middle East has sparked debate over its potential impact on global oil prices. Some analysts argue the market may be underestimating the geopolitical risks and the potential disruption to supplies, but the situation is more nuanced. Since neither Palestine nor Lebanon have any oil (although the latter does have gas), there is no direct danger to oil supplies from the conflict at present. Any geopolitical risk would come from a prolonged conflict with Iran—one of the largest producers within OPEC, with output at 4m b/d and exports of 1.3m b/d of, mainly to China. The market is clearly not ‘buying’ the worst-case scenario as likely An Israeli
Also in this section
16 January 2026
The country’s global energy importance and domestic political fate are interlocked, highlighting its outsized oil and gas powers, and the heightened fallout risk
16 January 2026
The global maritime oil transport sector enters 2026 facing a rare convergence of crude oversupply, record newbuild deliveries and the potential easing of several geopolitical disruptions that have shaped trade flows since 2022
15 January 2026
Rebuilding industry, energy dominance and lower energy costs are key goals that remain at odds in 2026
14 January 2026
Chavez’s socialist reforms boosted state control but pushed knowledge and capital out of the sector, opening the way for the US shale revolution
