US-Israeli War with Iran Triggers Global Energy and Food Crisis

A joint military campaign launched by the United States and Israel against Iran on February 28, 2026, triggered a systemic global crisis. The conflict, which included the death of Supreme Leader Ali Khamenei, led Iran to blockade the Strait of Hormuz, effectively halting 20% of global oil and LNG supplies. The International Energy Agency characterized this as the largest energy supply shock in history, with cumulative losses exceeding 1 billion barrels of crude and condensate. In response, the U.S. implemented its own naval blockade of Iranian ports, while Iran deployed an asymmetric warfare strategy using drones, missiles, and sea mines to target regional infrastructure in Qatar, Saudi Arabia, and the UAE.

The economic fallout was immediate and global. Oil prices surged above $100 per barrel, driving retail fuel costs to record highs in the U.S., UK, and Canada. Developing nations in Asia and Africa faced extreme volatility, leading to fuel rationing, four-day work weeks, and national emergencies in countries like the Philippines and Pakistan. Beyond energy, the closure of the strait disrupted one-third of the global seaborne fertilizer trade. The UN and Food and Agriculture Organization warned that this shortfall, combined with export restrictions from Russia and China, could push an additional 45 million people into acute hunger as critical planting windows were missed.

Despite a fragile ceasefire announced by Donald Trump on April 7, maritime instability persisted. By May 2026, thousands of seafarers remained trapped in the Persian Gulf. While some markets saw a shift toward renewables and electric vehicles, global inventories reached eight-year lows. US President Donald Trump maintained the naval blockade until a nuclear deal is reached, while Iranian leadership continued to demand sovereignty over the strait as a condition for reopening.