Middle East and North Africa

Peace between the United States and Iran has broken down, and the price of Brent crude oil is rising. While prices are still well below previous wartime peaks, oil markets are once again under pressure—and things are almost certain to get worse.

During the first round of the war, oil prices never reached the calamitous levels predicted by some analysts. This seems to have taught the White House a flawed lesson: that the global oil system is more robust than the doomsayers claim and that a war over the world’s most important energy chokepoint can be fought without a significant energy crisis at home.

Peace between the United States and Iran has broken down, and the price of Brent crude oil is rising. While prices are still well below previous wartime peaks, oil markets are once again under pressure—and things are almost certain to get worse.

During the first round of the war, oil prices never reached the calamitous levels predicted by some analysts. This seems to have taught the White House a flawed lesson: that the global oil system is more robust than the doomsayers claim and that a war over the world’s most important energy chokepoint can be fought without a significant energy crisis at home.

But this is a dangerous misreading. The relative price stability of the market during the first half of 2026 rested on an inherited stock of buffers accumulated over decades: brimming inventories, untapped strategic reserves, insurance capacity, spare production, and a deep well of consumer tolerance. These are reservoirs, not renewable flows—and many of them have now been drained to a significant degree.

Now, resumed fighting, the reclosure of the Strait of Hormuz, and the Houthis’ maritime embargo against Saudi Arabia are forcing a renewed reckoning with the precarity of global oil stockpiles. With many of the critical shock absorbers expended, an escalation in oil prices will likely be much more rapid this time around.

When Iran first closed the Strait of Hormuz early in the war, the world held roughly 8.4 billion barrels of oil in storage, an unusually high cushion built up through two years of oversupply. However, that entire stockpile wasn’t necessarily available for withdrawal; according to J.P. Morgan, only about 800 million of those barrels could be accessed without pushing physical infrastructure—wells, pipelines, tankers, and refineries—into operational stress. By late April, roughly a third of that usable buffer had already been consumed, and the bank warned that if the situation persisted, inventories would hit critically low levels by September.

At the war’s start, the United States held some 414 million barrels in reserve. As part of a coordinated release by 32 countries, the largest in the history of the International Energy Agency (IEA), Washington committed to drawing significantly from those reserves. By mid-July, that number had fallen to 316 million, its lowest level since 1983. While that may still seem like a healthy amount, geological factors limit how much more can be withdrawn and at what pace. The U.S. Strategic........

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