Oil and gas shutdowns in Iraq and Kuwait widen the Iran war’s impact on energy prices, while the U.S. lines up insurance and naval escorts in response

The cycle started this week with Qatar ceasing most of its liquefied natural gas output. Then Iraq and Kuwait began shutting down production from their oilfields. The United Arab Emirates and Saudi Arabia may soon follow suit.

It’s not because these oil and gas fields are under military threat (though some of them may be). The problem is the effective closure of the Strait of Hormuz because of the war in Iran. The tightening of that chokepoint gives many of the Gulf energy producers few export outlets for their barrels. That sets off a chain reaction—with domestic storage filling up and then forcing the shuttering of production.

That shuttering, in turn, could create long-term trouble. Oil and gas wells don’t operate like light switches. The shutdown process can trigger equipment failures and geological breakdowns and, even in best-case scenarios, it can take several weeks to resume the full flows of hydrocarbons.

The “silent killer” of global energy isn’t just the war; it’s the irreversible physical decay that happens the moment oil production stops, explained Sid Misra, petroleum engineering professor at Texas A&M University. The oil can be trapped in the subsurface as returning water rushes to fill the pore space.

“This oil is not just paused; it is physically locked away from ever being produced through the wellbore,” Misra stated. “Even when the conflict ends, that production capacity may be gone forever, permanently reducing global supply and raising the long-term floor price of energy.”

The good news for global oil markets is that Middle Eastern nations in OPEC are more adept at adjusting production flows than anywhere else in the world, said Pavel Molchanov, energy analyst at Raymond James.

“In the Middle East, there’s a long history of oilfields modulating production up and........

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