Six Months Into Iran War, Gulf Energy Disruption Keeps Oil Prices Elevated as Market Risk Persists

Six months into the US-Israel war on Iran, the worst predictions of a global economic catastrophe have not materialised — but the conflict’s impact on Gulf energy and oil prices remains a persistent market risk, even as financial markets have recovered.

Oil prices surged after the war began on February 28. Brent crude rose from around $72 a barrel before the conflict to nearly $120 at its peak as shipping through the Strait of Hormuz was disrupted, according to the Times of India. Prices have since eased, with Brent trading at about $88 — still some 22% above pre-war levels, Al Jazeera reported. The Strait of Hormuz, through which one-fifth of the world’s oil and natural gas was shipped before the war, remains largely closed to commercial traffic. Iran and Oman agreed last week on a temporary maritime route, but Iran has said the strait will not fully reopen until the United States fulfils commitments under a lapsed interim peace deal, leaving longer-term security and management arrangements unresolved, according to Al Jazeera.

The International Monetary Fund said in July that the global economy was being shaped by two forces pulling in opposite directions: the war weighing on growth and enthusiasm around AI providing an offset, the Times of India reported.

**US Oil Companies: Windfalls and Exposure**

The disruption has delivered a windfall for major US oil producers, but the gains are tempered by operational challenges in the Gulf. Al Jazeera reported that the largest US oil companies have posted their biggest profits since 2022, selling less oil at far higher prices. However, the conflict is also putting their longstanding Gulf investments at risk.

Chevron, which has limited exposure to Arab Gulf supply disruptions — the region accounts for just 5% of its total global output — reported its highest quarterly profit in six years, with adjusted earnings of $12 billion on July 31, according to Al Jazeera. By contrast, ExxonMobil has been far more exposed. The company’s operations in Qatar and the UAE, which together account for 20% of its global equity upstream supply, have been affected by the closure of the Strait of Hormuz and Iranian attacks on US-linked infrastructure. In the first half of 2026, ExxonMobil’s upstream earnings dropped by about $1.3 billion compared with the same period in 2025, due to lower volumes from the Middle East. The shortfall was covered by higher commodity prices, Al Jazeera reported, citing Rahul Choudhary, vice president of Upstream Research at Rystad Energy.

Choudhary told Al Jazeera the conflict has already reduced the amount of oil and gas US energy firms are drawing from the Gulf region. “Overall we expect US companies’ share of gas supplies [from the region] to fall by around 40 percent this year compared to last year [and] the share of oil supplies to drop by 30-35 percent,” he said. Prolonged disruption is likely to delay major projects and weigh on future growth plans of US companies with a presence in the region.

**Attacks on Energy Infrastructure**

Iran and Iran-backed groups have carried out at least 172 attacks on nonmilitary infrastructure across the six Gulf Cooperation Council countries since the war began, according to the Armed Conflict Location and Event Data project, as reported by Al Jazeera. Energy infrastructure has been the hardest-hit category, with oil and gas facilities along with power plants and desalination plants accounting for nearly half — 48 percent — of all strikes on nonmilitary targets. The UAE, Kuwait and Bahrain have suffered the highest number of successful strikes, with the majority aimed at oil and gas facilities.

**Winners and Losers Beyond Oil**

The economic impact has been uneven, the Times of India reported, with higher energy and transport costs hitting airlines, motorists and consumers, while rising fertiliser prices have added pressure on farmers and food security.

Airlines have been among the biggest casualties. Higher fuel costs have pushed carriers to raise fares, increase baggage fees and introduce fuel surcharges, while some have reduced flights. The International Air Transport Association expects jet fuel prices to average 70% higher in 2026 than in 2025, the Times of India reported. “The likelihood that fuel surcharges are going to be rolled back and airfares are going to be brought down is very low over the next few months,” Brett House, an economist at Columbia University, told the Times of India.

Fertiliser prices peaked in April at 44% above pre-war levels, according to the World Bank, and some farmers have reduced fertiliser use, potentially affecting future crop yields.

On the other side, investors who stayed calm have seen strong equity market recoveries. From their late-March lows, the Dow Jones has gained nearly 19%, the S&P 500 almost 22% and the Nasdaq about 27%, the Times of India reported, citing AP. The rebound suggests investors have looked past the war’s economic disruption, supported in particular by expectations around AI.

The crisis has also accelerated interest in electric vehicles and renewable energy. EV sales rose 110% year-on-year in Singapore, 180% in New Zealand and 300% in Colombia, according to figures cited by the Times of India. The International Energy Agency expects EVs to account for 29% of global vehicle sales in 2026, up from 25% in 2025.

US defence contractors have also benefited. Companies involved in missile defence, drones and satellites have secured contracts linked to the US response. Lockheed Martin, General Dynamics and Northrop Grumman were named, and the Times of India also reported that some companies linked to investment portfolios of members of President Donald Trump’s family have also reportedly gained, including military contractor Powerus, which secured a US Air Force contract worth up to $90 million to supply interceptors for Iranian drones, and Anduril, which received US approval for up to $2 billion in drone-interceptor sales to Kuwait. The White House has said there are no conflicts of interest.

**Market Risk Remains**

Despite the stock market recovery and windfall profits for some companies, the war’s effect on Gulf energy remains a key risk. The temporary maritime route agreed between Iran and Oman has not resolved the Strait of Hormuz’s long-term status, and attacks on energy facilities continue. As the Times of India noted, the International Monetary Fund’s assessment of two opposing forces — war and AI — underscores that the global economy’s path depends heavily on how the energy disruption evolves. For now, Gulf energy remains a fault line that markets cannot ignore.