Fact Sheet: How Iran War Affects Global Energy

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PLYMOUTH INSTITUTE FOR FREE ENTERPRISE FACT SHEET: HOW IRAN WAR AFFECTS GLOBAL ENERGY Austin Gae, Policy Analyst APRIL 7, 2026

TOPLINE: The Iran war and Tehran’s partial closure of the Strait of Hormuz have driven a global energy crunch, sending prices skyrocketing as supply constricts and volatility scares investors. Governments around the world have tried different measures including emergency oil releases, fuel price caps, and demand controls to lower energy prices. But the reality is - prices will likely remain high until the strait reopens, and the war concludes.

TIMELINE: Iran War & Energy Costs: • February 28: U.S. and Israel launched military strikes against Iran, killing top

government officials and targeting military facilities. • March 2: Iran began threatening shipping in the Strait of Hormuz, restricting

shipping through the narrow sea passage connecting the Persian Gulf to the Arabian Sea.

o About 20% of the world’s oil and liquified natural gas (LNG) transits

through this strait. o Saudi Arabia, United Arab Emirates, Iran, Iraq, Kuwait, Qatar, and Bahrain

export oil through this strait.

▪ READ MORE: AAF VP Dr. Kevin Dayaratna: How Iran War Oil Crisis

Teaches a Valuable Lesson. • March 18: Israel struck Iran’s South Pars gas field, which makes up 70% of the

country’s gas production. • March 18-19: Iran struck Qatar’s Ras Laffan Industrial City, the nation’s main site for

producing LNG. Iran also targeted Saudi Arabia, United Arab Emirates, and Kuwait. It also hit an Israel’s oil refinery with limited damages.

Beyond the major actions described above, Iranian attacks also damaged refineries in Saudi Arabia, Bahrain, and Kuwait, struck a UAE’s oil export hub and its Shah gas field, and disrupted other energy infrastructure across the region.

The United States bombed only military assets on Iran’s Kharg Island, which accounts for 90% of the nation’s crude oil exports.

TIMELINE: Trump Administration’s Response to Higher Oil Prices:

• March 5: The U.S. issued a temporary 30-day waiver to allow India to buy Russian

oil. • March 11: The U.S. will release 172 million barrels of oil from the Strategic

Petroleum Reserve, which would take four months to deliver to the market.

2 For more of our research and scholarship, visit our website: www.advancingamericanfreedom.com.

• March 12: The U.S. temporarily allowed nations to buy sanctioned Russian oil

already at sea for a month. • March 13: The Energy Department ordered a company to restore offshore oil and

gas operations in California. • March 18: The Treasury Department allowed Petróleos de Venezuela S.A., the

state-owned oil and gas company, to directly sell oil to the U.S. • March 18: The Trump administration temporarily waived the Jones Act, which

requires ships transporting cargo like crude oil from one American port to another to be mostly U.S. built, owned, crewed, and flagged. • March 20: The Treasury Department temporarily allowed the purchase of

sanctioned Iranian oil already at sea. • March 20: Georgia temporarily paused its gasoline and diesel tax for sixty days. • March 25: The Environmental Protection Agency will temporarily allow E15

(gasoline blended with 15% ethanol) from May 1 to May 20.

o E15 is cheaper than the common E10.

How Are Other Countries Responding to Higher Fuel Prices?

• Nations have tried increasing oil supply:

o The International Energy Agency’s 32 member nations will release 400

million barrels of oil from their reserves. o Saudi Arabia rerouted oil exports to the Red Sea. o Meanwhile, Iran allowed ships from China, Russia, India, Iraq, and

Pakistan to safely transit the Strait of Hormuz. • Some countries implemented price controls:

o For instance, South Korea temporarily imposed price caps on gasoline

and diesel to not surpass about $4.40 per gallon. o Japan, Hungary, and Greece took similar measures. • Italy, Austria, and Brazil temporarily cut taxes on fuel to lower prices. • China, Thailand, and Serbia temporarily banned fuel exports to prevent

domestic shortages. • Some nations artificially reduced demand:

o For example, Sri Lanka designated every Wednesday a public holiday

and implemented fuel rationing. o The Philippines enacted a four-day work week for government

3 For more of our research and scholarship, visit our website: www.advancingamericanfreedom.com.

• The Trump administration is trying to strike a balance between national security

priorities and energy policy objectives. • President Trump recently postponed military strikes on Iranian power plants and

energy infrastructure for five days after diplomatic talks between Washington and Tehran. • So far, measures have had a limited impact on taming oil prices.

o REALITY CHECK: Energy prices are likely to remain high until the war

ends, and the Strait of Hormuz reopens.

BOTTOMLINE: As with all wars, energy supply and prices are unpredictable. But one thing is clear: countries should increase domestic production of energy to reduce vulnerability in future conflicts.

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