The Iran War at Six Months: Energy, Markets, and National Security

Global oil markets have weathered six months of intense conflict in the Strait of Hormuz without the anticipated price catastrophes, largely due to unexpected demand-side management and strategic shifts. China emerged as a critical market balancer, significantly reducing import volumes and utilizing massive strategic reserves to stabilize prices. While the United States and its allies have moved from financial sanctions to active naval blockades, this escalation has forced a reliance on "dark fleets" and increased the risk to energy infrastructure. As the conflict persists, the focus is shifting from temporary supply curtailment to long-term demand destruction, with nations reconsidering their dependence on fossil fuels in favor of diversified energy sources. The current reliance on naval escorts and strategic reserve draws remains a costly, unsustainable strategy, leaving markets vulnerable to further escalation and potential structural changes in global energy consumption.