Hormuz to Bab al-Mandab: The Cost of Escalation 

Oil and petroleum-product prices remained relatively stable until February 28, 2026, when Brent crude stood at $72.48 per barrel. By September 10, 2026, it had reached $107.63, an increase of roughly $35. With nearly 20 percent of the world’s oil supply potentially at risk, markets have been shaken by signs of Iranian coercion and maritime disruption in the Strait of Hormuz, ranging from attacks on oil tankers to threats to impose transit fees.

Iran has also launched attacks against Arab states despite agreements previously concluded with its neighbors. These include the Saudi Iranian agreement signed on March 10, 2023, under Chinese auspices, in which Iran was represented by Ali Shamkhani, then secretary of the Supreme National Security Council, as well as the Iranian Qatari defense cooperation agreement signed on February 23, 2010. The two countries have since concluded several memoranda of cooperation and held coast guard meetings, with Qatar participating as an observer in the IMEX maritime exercises hosted by Iran on October 19, 2024.

Yet despite agreements based on respect for sovereignty and non-interference, Iran has turned Gulf airspace into an arena for missiles and drones, launching more than 1,200 missiles and approximately 3,900 drones against Gulf states.

Events escalated further on March 1, when three oil tankers were damaged and a sailor was killed. More than 200 vessels subsequently came to a halt around the Strait of Hormuz, and oil and petroleum-product markets have remained volatile ever since. Sultan Al Jaber, chief executive of ADNOC, stated that the Strait of Hormuz had effectively become closed. ADNOC’s production fell by more than 50 percent, while energy facilities in Saudi Arabia, Qatar, Kuwait, Bahrain, and the United Arab Emirates faced attacks or threats. Meanwhile, approximately 230 loaded oil tankers were delayed.

The Russia-Ukraine war has compounded the disruption to global oil markets. On April 18, for example, a wave of strikes targeted energy infrastructure, including oil-storage facilities and Russia’s Saratov refinery. Russia’s Ryazan refinery had already been hit in January 2025, while the Kropotkinskaya pumping station on the Caspian Pipeline Consortium network was also attacked.

Other incidents included strikes on the Ryazan and Syzran refineries; Ukrainian drone attacks against the Novokuibyshevsk and Syzran refineries in Russia’s Samara region; an oil depot in Crimea; the Baltic port of Vysotsk, which exports diesel and fuel oil; and facilities associated with the port of Novorossiysk. Energy infrastructure in Iran was also targeted, including facilities in South Pars and Tehran’s Shahran oil depot on June 16, 2025.

Saudi Arabia, meanwhile, sustained additional attacks by Houthi militias using Iranian weapons and acting on Iranian orders, targeting four cities in southern Saudi Arabia. More than 70 people were injured, and fires broke out at oil facilities, contradicting Iranian claims that only U.S. military bases were being targeted. In the aftermath, Brent crude climbed to $97.92 per barrel, while U.S. crude reached $93.03.

It soon became clear that the Bab al-Mandab Strait was no longer secure either. The Eternity C was attacked and sunk, killing four sailors, while the Magic Seas was also sunk on July 7, 2025. On September 8, 2026, Houthi forces again targeted Saudi cities and oil facilities. The conflict, unfortunately, continues.

Oil markets deteriorated further on September 9 amid one of the most serious escalations, when the United States struck five Iranian oil tankers. At the same time, the tanker New Andros, carrying two million barrels of Iraqi fuel oil, was hit, while other vessels sustained damage in the Gulf and the Gulf of Oman. Brent crude consequently climbed above $101 per barrel.

The U.S. response to Iran, including strikes against military targets on Kharg Island, contributed to further price increases. Strikes on South Pars and Assaluyeh added to market pressures. Iran subsequently attacked Saudi Arabia’s Jubail complex on April 7, 2026, pushing the price of oil to $138.21 per barrel.

These incidents represent only examples of the scale of destruction and disruption affecting oil and gas markets across Russia, Ukraine, Iran, and the Arab Gulf. Between February 27 and April 7, oil prices rose by approximately 94 percent, from $71.32 to $138.21 per barrel.

Qatar’s liquefied natural gas sector has faced an even more severe situation. Qatari LNG exports collapsed by 96 percent, with the country managing to export only 18 cargoes out of 509, resulting in losses exceeding $24 billion. U.S. natural gas prices remained near $3 because the American market is largely self-sufficient. European gas prices, however, doubled, while Asian prices experienced an even sharper surge because both Europe and Asia depend heavily on LNG shipments from Qatar and the Gulf.

The Strait of Hormuz and the Impact on Syria

Syria has not yet achieved self-sufficiency in either oil or natural gas and therefore remains dependent on imported petroleum products and gas purchased at international prices—prices that, as noted above, have at times nearly doubled.

Attacks on oil wells and fields in Russia, the Gulf, and Iran reduce the volume of crude available on international markets. This inevitably affects crude prices and, subsequently, the prices of refined petroleum products.

For Syria, however, the greater danger lies in attacks on refineries around the world. Even when crude oil remains available, reduced refining capacity constrains the ability to turn it into usable fuels. The result is an immediate increase in the prices of diesel, gasoline, kerosene, and aviation fuel.

Higher fuel prices then raise the cost of road, maritime, and air transportation, which in turn affects virtually every agricultural and industrial commodity. Tourism also becomes more expensive as airline ticket prices rise because of shortages and higher costs of aviation fuel.

Syria and other import-dependent economies consequently fall into the trap of “imported inflation”: domestic prices rise for reasons that have little to do with Syria itself or with the management of its economy, but rather with severe disruptions in global oil and gas markets.

“Syria and other import-dependent economies are caught in the trap of ‘imported inflation,’ paying for disruptions that originate far beyond their borders.”

Dr. Osama Kadi

Attacks on oil tankers and ports also create supply shortages, but an equally serious consequence is the sharp increase in shipping and insurance costs. These higher costs are inevitably incorporated into the prices of crude oil, petroleum products, and liquefied natural gas. Because energy and transportation costs affect most imported goods, consumers ultimately bear the burden.

Exporters are also harmed because rising transportation costs undermine their competitiveness, particularly when consumers become reluctant to purchase goods whose final prices have increased substantially.

Marine insurance itself consists of several components: hull and machinery insurance; protection and indemnity coverage; cargo insurance; war-risk insurance; and loss-of-hire insurance, which compensates shipowners when vessels are detained or forced out of service. In extremely high-risk areas, policies may also include kidnapping and ransom coverage as well as crew-evacuation insurance.

As a result, insurance costs have recently increased approximately sixfold. These additional costs feed directly into freight rates and ultimately into consumer prices.

Consider a simplified example. Before the conflict, a vessel valued at $100 million might have carried a war-risk premium of approximately 0.125 percent, equivalent to $125,000. If the vessel carried two million barrels of oil, that would add roughly six cents to the cost of each barrel.

During the first phase of the conflict, if the premium rose to 0.5 percent, the insurance bill would increase from $125,000 to $500,000—adding approximately 25 cents per barrel. Today, if the insurance cost reaches between $10 million and $20 million, the additional burden becomes roughly $5 to $10 per barrel.

All these increases are eventually reflected in the prices of petroleum products imported by countries such as Syria. Ultimately, it is the ordinary citizen who pays the price of Iranian coercion, conflict over strategic waterways, and the Russia-Ukraine war—while often assuming that the cause lies solely with the Ministry of Energy or with domestic mismanagement.

The reality is that war has global economic consequences.

The more Syria can increase its domestic oil production, move toward greater energy self-sufficiency, and rehabilitate its refineries, the better it will be able to limit the inflationary pressures it currently imports through its dependence on global oil and petroleum-product markets.

“The more Syria strengthens domestic oil production, advances toward energy self-sufficiency, and rehabilitates its refineries, the better it can shield its economy from imported inflation.”

Dr. Osama Kadi

When strategic waterways are closed, prices surge, tankers and refineries are attacked, and conflict spreads across the arteries of global energy trade, the entire world pays the price of Iran’s destabilizing policies and its attempts to damage energy infrastructure in Arab states despite existing agreements.

Repeated incidents demonstrate the Iranian regime’s failure to uphold a number of its commitments, the principles of good-neighborly relations, and security cooperation agreements—a pattern that evokes the Qur’anic verse: “They respect neither kinship nor covenant with a believer.”

Iran respects neither sanctity nor covenant, while the peoples of the region are left to bear the cost of escalation, in their security, their livelihoods, and the price of energy.