Energy
Crude oil & products
What the strait carried, what is shut in because its outlet is unusable, and the price series each figure belongs to.
Conflict coverage · Iran–Gulf
AssessmentModerate confidence
Not investment advice. This surface explains exposure and transmission channels; it never recommends, ranks or names securities. Figures are estimates and carry their own as-of dates and confidence grades.
Current state
Where this economy stands
Moderate confidence · Economic data as of 2026-08
The Gulf's economic exposure is not a portfolio of separate risks. Oil exports, gas exports, electricity and drinking water depend on overlapping fixed infrastructure reachable from the same waterway, which is why a single disruption reaches all four at once. What follows separates the quantities that are usually collapsed into one — what an asset can carry, what it actually carried, what has no alternative, and what production is being held back because its outlet is unusable. It is an exposure and transmission analysis, not investment advice.
UN measures reimposed 28 September 2025 following the E3 snapback; EU measures reimposed 29 September 2025
Sanctions status
Remains a member following the UAE's withdrawal effective 1 May 2026
OPEC status
A second line reported as targeting around 3.6m b/d of bypass capacity by mid-2027
Bypass expansion
An announced plan, not an asset. Vigil records plans as plans.
Reported at about half of pre-conflict export volumes
2026 export forecast
The economy, as analytical objectsWhat is economically exposed in Iran–Gulf, as 7 selectable objects. Each carries its own records, its exposure class and — where the corpus establishes one — the mechanism by which pressure reaches it.Interrogate Iran–Gulf in Explore
Energy
Liquefied natural gas
Capacity destroyed rather than diverted: liquefaction has no pipeline substitute, and no rerouting shortens a repair.
Trade & transport
Hormuz transit & bypass capacity
One waterway carrying four dependencies, and the bypass arithmetic — a capacity comparison, never a measurement of what moved.
Finance
Iran’s export economy
Sanctioned volumes, the discount they carry and the single buyer relationship the revenue depends on.
Sanctions
Sanctions architecture
The standing United States and European restrictive measures on Iran — the legal architecture the whole regional economic file sits inside.
Infrastructure
Power, water & fuel imports
Gulf electricity and desalinated drinking water run on continuous fuel supply, which is why an export disruption is also a domestic one.
Market access
Marine war-risk insurance
Cover is what makes a voyage possible. Its withdrawal stopped traffic the water never stopped — and the premium baseline is disputed.
The full assessment9 blocks of analysis and 4 graded exposures, filed under the objects above — the module’s own words, with their own dates
Everything below is authored on this module’s economy record. Figures carry the vintage of the release that produced them, not the date of this page: the section is graded Moderate confidence and its figures are stated as of 2026-08.
Crude oil & productsEnergyHigh exposure
| Commodity | Why it matters here | Exposure |
|---|---|---|
| Crude oil and refined products | Roughly 20 million barrels a day pass the strait, about a third of global crude trade. Every pipeline bypass combined moves a fraction of it, and the bypasses are Saudi and Emirati only — the other four Gulf states have no alternative at all. | High exposure |
Shut-in production — a series, not a figure
As of 2026-06
Production withheld because the outlet is unusable is the war's clearest economic quantity, and it grew rather than arriving at a level. Quoting "about eleven million barrels a day" as the figure states the May–June peak as though it were a constant. Shut-in is also not a loss of reserves: the oil is still in the ground, and the constraint is the route rather than the resource. Every row below is an EIA Short-Term Energy Outlook estimate and carries the vintage of the release that produced it, because successive outlooks revise each other and a revision is not a contradiction.
- Mar 2026 (April STEO)
- 7.53 million b/d shut in
- Apr 2026, forecast (April STEO)
- 9.10 million b/d
- May 2026 (June STEO)
- 11.3 million b/d
- Jun 2026, forecast (June STEO)
- 11.34 million b/d
- 3Q 2026, forecast (June STEO)
- 10.11 million b/d
- 4Q 2026, forecast (June STEO)
- 5.70 million b/d
Sources: US EIA Short-Term Energy Outlook and Today in Energy↗ · Congressional Research Service — Iran, the Gulf and the Strait of Hormuz
Prices, spreads and inventories, each with its series named
As of 2026-07
Brent spot averaged 103 dollars a barrel over March 2026, 32 dollars above February, and the daily spot reading on 2 April was about 128. The second-quarter high for Brent front-month futures was 118 dollars on 29 April, with a low of 72 on 26 June. Those two April figures are not a contradiction: spot and front-month futures diverge in steep backwardation, which is what an acute supply shock produces, and the module names the series every time. Average daily volatility ran 4 dollars a barrel in April–May 2026 against 1 dollar a year earlier, and the Brent–WTI spread widened to 12 dollars in March from 6 in February. Gas spreads moved with it: Henry Hub to TTF at 14.89 dollars per MMBtu in March, up 83% on February, and Henry Hub to the Japan-Korea Marker at 15.23, up 98%, with US LNG exports at 17.9 Bcf/d, the second-highest month on record.
- Brent spot, monthly average
- $103/bbl, March 2026 (April STEO)
- Brent spot, daily
- ~$128/bbl, 2 April 2026 (April STEO)
- Brent front-month futures, Q2 high
- $118/bbl, 29 April 2026 (Today in Energy)
- Brent front-month futures, Q2 low
- $72/bbl, 26 June 2026
- OECD oil inventories
- lowest since 2003, stated 9 June 2026
Sources: US EIA Short-Term Energy Outlook and Today in Energy↗ · Public market and insurance data · IEA electricity and energy-security analysis
What to watch
- The shut-in trajectory and its vintageWhether successive outlook releases continue to revise the shut-in series down from the May–June peak, and whether any revision reflects restored outlets or reduced demand. Compare like vintages; a March estimate against a June outlook measures the release, not the war.
- Inventory draws and the remaining bufferOECD stock levels and the size of the draw, which is what has absorbed the disruption so far. A buffer that is being spent is not a standing buffer.
Liquefied natural gasEnergyHigh exposure
| Commodity | Why it matters here | Exposure |
|---|---|---|
| Liquefied natural gas | Close to a fifth of world LNG exports must transit the strait, and unlike oil there is no pipeline that substitutes for liquefaction. Damage at Ras Laffan removed capacity for a period its operator estimates in years, which no rerouting can shorten. | High exposure |
Liquefied gas has no pipeline substitute
As of 2026-04
The bypass argument does not extend to gas, because the constraint is liquefaction rather than the route. Two of Ras Laffan's fourteen trains were damaged on 18 March 2026 — about 17% of Qatari export capacity on the EIA's own figure, roughly 12.8 Mtpa — and QatarEnergy's own repair estimate is up to five years. A drone attack on 2 March had already suspended production and struck a water tank at the Mesaieed power plant; a gas-to-liquids facility was damaged the same month. This is capacity destroyed rather than diverted: no rerouting shortens it, and no alternative export path exists for the volumes involved. Qatar's 2026 exports are forecast at 38.7 Mt, roughly half the pre-conflict level, and QatarEnergy's own estimate of forgone revenue is around 20 billion dollars a year.
Sources: IEA electricity and energy-security analysis · US EIA Short-Term Energy Outlook and Today in Energy↗ · Gulf state official government sources
What to watch
- Ras Laffan repair progressAny operator statement that moves the up-to-five-year train repair estimate in either direction. Liquefaction capacity has no substitute, so this is the one quantity here with no bypass argument attached to it.
Hormuz transit & bypass capacityTrade & transport
One waterway, four dependencies
As of 2026-08
The Gulf's economic exposure is not a portfolio of separate risks that happen to sit near each other. Hydrocarbon exports, gas exports, electricity generation and desalinated drinking water depend on overlapping fixed installations reachable from the same strait, so a single disruption reaches all four at once and the usual diversification argument does not apply. Around 20 million barrels a day of crude and products passed the Strait of Hormuz before the war — about a third of global crude trade on the CRS denominator — alongside close to a fifth of world LNG exports. Those two denominators are different measures and are not interchangeable, and this module states which one it is using every time it quotes a share.
Sources: Congressional Research Service — Iran, the Gulf and the Strait of Hormuz · IEA electricity and energy-security analysis
The bypass arithmetic — capacity is not relief
As of 2026-04
Every alternative to Hormuz combined is estimated at 3.5 to 5.5 million barrels a day against a normal strait volume of about 20 million. That is the module's central number and it is a CAPACITY comparison, not a measurement of what moved. Saudi Arabia's East–West (Petroline) system carries a roughly 7 million b/d emergency ceiling established in 2019 — never a demonstrated sustained rate — and Aramco announced a ramp to full capacity on 10–11 March 2026; wartime handling at Yanbu is estimated commercially at about 3 million b/d, of which roughly 2 million goes to Aramco's own Red Sea refineries before export crude can load, and an Iranian drone strike in April 2026 temporarily disabled about 700,000 b/d of it. The UAE's ADCOP line to Fujairah is just under 2 million b/d of capacity with about 1.5 million reported handled; a second line targeting 3.6 million b/d by mid-2027 is a plan, not an asset. Iraq's Türkiye line reopened in September 2025 and moved about 250,000 b/d in March 2026 against pre-war Iraqi exports of 3.4 million. Bahrain, Kuwait, Qatar and Oman have no bypass at all.
Sources: IEA electricity and energy-security analysis · Congressional Research Service — Iran, the Gulf and the Strait of Hormuz
What to watch
- Bypass throughput as against bypass capacityMeasured loadings at Yanbu and Fujairah rather than announced ramp-ups. The gap between the two is where the module's central arithmetic is either confirmed or revised.
Iran’s export economyFinance
Iran's own export economy
As of 2026-06
Iran's exposure is structurally different: its problem is buyers and payment channels rather than a strait it borders. Up to about 90% of pre-war crude exports loaded at Kharg Island, inside the Gulf. The Goreh–Jask line built to bypass the strait has a 1 million b/d design capacity and moved under 70,000 b/d in summer 2024 — a single tanker loaded there during the 2026 conflict, which is the clearest illustration in the module of the distance between a design capacity and a flow. Iranian crude exports were nonetheless maintained above 2 million b/d in early March 2026 on the CRS reading, with commercial shadow-fleet trackers estimating 1.65 to 1.80 million b/d of crude and condensate; roughly 90% of it goes to China. Sanctions architecture, not the waterway, is the binding constraint on the price Iran realises.
Sources: Congressional Research Service — Iran, the Gulf and the Strait of Hormuz · US / EU / UK sanctions designations · IEA electricity and energy-security analysis
What to watch
- Iranian export volumes and the discount they carryWhether roughly 2 million b/d holds, and at what realised price. Volume and price move independently under sanctions, and a volume figure alone says nothing about revenue.
Sanctions architectureSanctions
Power, water & fuel importsInfrastructureModerate exposure
| Commodity | Why it matters here | Exposure |
|---|---|---|
| Refined product imports and power fuel | Gulf electricity generation and desalination run on continuous fuel supply, which is why an export disruption is also a domestic one. Stated at national level only. | Moderate exposure |
The domestic side — power, water and fuel imports
As of 2026-06
Gulf electricity generation and desalination run on continuous fuel and gas supply, which is why an export disruption is simultaneously a domestic one, and why damage to a power-plant water tank is an economic event rather than a symbolic one. This module states that dependency at national level only. It authors no plant-level water or electricity margins, because the operating data that would make such a claim measurable is not public for most of these states and an estimate would be indistinguishable from a targeting inference. Reported Gulf infrastructure damage was put above 25 billion dollars by early April 2026, a figure the Congressional Research Service attributes to an external estimate rather than producing itself.
Sources: IEA electricity and energy-security analysis · Gulf state official government sources · Congressional Research Service — Iran, the Gulf and the Strait of Hormuz
Marine war-risk insuranceMarket accessHigh exposure
| Commodity | Why it matters here | Exposure |
|---|---|---|
| Marine war-risk insurance | Not a commodity in the ordinary sense, and the one that actually closed the strait. Cover is what makes a voyage possible, and its withdrawal in March 2026 stopped traffic that the water itself never stopped. | High exposure |
War-risk insurance — the mechanism that stopped the traffic
As of 2026-07
What halted commercial transit was not the water. Protection-and-indemnity clubs issued 72-hour termination notices in early March 2026, and replacement cover was quoted at roughly 30,000 dollars a week against a prior cost of about 25,000 dollars a year. A vessel without cover does not sail: no charterer loads it and no bank finances it. Benchmark Middle East–China freight reached 423,736 dollars a day against pre-crisis highs of 93,000 to 105,000. The premium progression below is the additional war risk premium as a share of hull value, from the better-specified source.
- Before Feb 2026
- 0.2% of hull value, already up ~60% on 2024
- Within 48h of 28 Feb 2026
- 1.0% of hull value
- June 2026, reported
- ~4% of hull value per 7 days
- July 2026, tanker segment
- 7.5–10% of hull value
- Disputed alternative baseline
- ~0.001% of hull value, basis not stated
Sources: Public market and insurance data · Joint War Committee — Listed Areas (marine war-risk)↗ · Reuters↗
What the insurance figures do not establish
As of 2026-07
Two credible sources put the pre-crisis premium two orders of magnitude apart — 0.2% against 0.001% — and neither states its basis clearly enough to reconcile; they may be measuring a per-voyage additional war risk premium against an annualised hull war rate. This module therefore publishes the progression above and NO multiplier. A four-thousand-fold or ten-thousand-fold increase depends entirely on which baseline is right, and that is precisely what is not established. The mechanism — cover withdrawn, voyages unfinanceable, traffic stops — is separately evidenced and does not rest on the size of the move.
Sources: Public market and insurance data · Joint War Committee — Listed Areas (marine war-risk)↗
What to watch
- War-risk rates and whether cover is written at allThe premium as a share of hull value, and — more decisive than the rate — whether protection-and-indemnity clubs resume writing cover. Traffic resumes when vessels are insurable, not when the water is called safe.
About this sectionScope and standing observables
Analysis and observables the module authors about its economy as a whole rather than about any one exposure. They are filed under no object because they belong to none.
What this section is not
As of 2026-09
This is an exposure and transmission analysis. It is not investment advice, not a forecast of its own and not a scenario set. Where a figure quoted here is a forecast it is labelled as one and carries the vintage of the outlook that produced it. Where a quantity is contested — the insurance baseline — the module publishes the disagreement rather than a midpoint, because two incompatible methodologies are not the endpoints of one range.
Actor economiesThe economic record Vigil holds on each of the 16 parties in this module — revenue base, figures and constraints, per actor
State actor — economic profile
Iran
An economy whose external earnings run through one terminal, one strait and effectively one customer — and which has been under reimposed UN sanctions since September 2025.
UN measures reimposed 28 September 2025 following the E3 snapback; EU measures reimposed 29 September 2025
Sanctions status
Reported at around 90% to China
Export destination concentration
The bypass that was not built
The Goreh–Jask pipeline was constructed to move crude to the Gulf of Oman, outside the strait. It was designed for around a million barrels a day and has been reported carrying under seventy thousand, with a single tanker loading there during the current war. Iran's exposure to a Hormuz closure is therefore closer to its neighbours' than the existence of the pipeline suggests. The system itself is authored in P3.
Confidence: ModerateSanctions instruments are documented. Export volumes rest on commercial tracking and on figures the Congressional Research Service reports without generating; the two do not agree and neither is treated as verified.Economic data as of 2026-09Iran — full profile →
State actor — economic profile
Saudi Arabia
The system's largest producer, holding its only large-scale escape route — into a sea lane that became contested in July 2026.
Remains a member following the UAE's withdrawal effective 1 May 2026
OPEC status
Asia-bound crude rerouted via Suez after the Houthi blockade declaration; Yanbu–South Korea voyage lengthens from roughly 24 to roughly 54 days
Red Sea routing
Trading one chokepoint for another
Moving barrels west to Yanbu removes them from the Strait of Hormuz and delivers them to Bab el-Mandeb, where shipping to and from Saudi ports has been under a declared blockade since July 2026. The two chokepoints are best read as one coupled system rather than as an exposure and its remedy. The impact chain is authored in P3.
State actor — economic profile
UAE
A producer with an ocean-facing escape route, an expansion plan, and no cartel obligations.
A second line reported as targeting around 3.6m b/d of bypass capacity by mid-2027
Bypass expansion
Terminal and storage facilities reported struck on 3, 14 and 16 March 2026
Fujairah disruption
Why the expansion figure is not a capacity figure
Announced pipeline projects are frequently reported as though they already relieve exposure. This module distinguishes design capacity, available capacity, actual flow and announced plans, and will not carry a future line as present relief. The logistics record is authored in P3.
State actor — economic profile
Qatar
An LNG economy with a single sea lane, running at roughly half its pre-conflict export capacity.
Reported at about half of pre-conflict export volumes
2026 export forecast
Henry Hub–TTF spread averaged $14.89/MMBtu in March 2026, up 83% on February; Henry Hub–JKM up 98% to $15.23/MMBtu
Gas price transmission
How a Qatari outage reaches other continents
Liquefaction capacity removed at Ras Laffan is not replaced elsewhere on the same timescale, so the adjustment shows up as price spreads between the American, European and Asian gas markets rather than as a shortage in any one of them. The transmission chain is authored in P3.
State actor — economic profile
Kuwait
A hydrocarbon exporter whose civilian resilience question is water, not oil.
No Hormuz alternative; all seaborne exports transit the strait
Export routing
Why this belongs in the economy section at all
Desalination is an energy system before it is a humanitarian one: the same plants produce the electricity and the water, and their fuel comes from the same sector as the exports. The module treats power and water as part of the region's energy architecture rather than as a separate civilian topic. The causal chain is authored in P3.
State actor — economic profile
Bahrain
A small producer whose significance in this system is diplomatic and maritime rather than volumetric.
No Hormuz alternative; all seaborne exports transit the strait
Export routing
Why volume is the wrong measure here
Bahrain produces less than a fiftieth of Saudi output and shaped the Gulf's collective diplomatic response to the war. The module sizes actors by their role in the system rather than by their production, and Bahrain is the clearest case for doing so.
State actor — economic profile
Oman
A modest producer whose exports leave by a coast the strait does not control.
Not included in EIA estimates of Hormuz closure-related production shut-ins
Closure exposure
Lower exposure is not no exposure
Exporting outside the strait protects Oman's own outbound flows. It does not protect its ports from being struck, its shipping from regional war risk premiums, or its economy from a regional disruption. The module distinguishes routing exposure from the broader exposure every state in the system carries.
State actor — economic profile
United States
The author of the sanctions architecture, and the supplier of last resort when Gulf barrels stop moving.
Record 5.8m b/d
Net petroleum exports
Strategic Petroleum Reserve release announced 11 March 2026, alongside an IEA collective stock release
Strategic reserve
The other side of a Gulf disruption
Removing Gulf barrels from the market raises demand for American ones. US net petroleum exports reached a record in April 2026, with distillate and jet fuel exports far above their five-year averages. Vigil records this as a structural consequence of the disruption, not as a motive, and makes no claim about intent.
State actor — economic profile
Israel
Not a Gulf energy actor; present in this module through security cooperation and defence-industrial ties rather than trade in the system's commodities.
None material
Energy role in this system
Why the economy block is nearly empty
Israel is analytically important here for security reasons and is largely absent from the module's commodity and shipping story. The module states that rather than manufacturing an economic profile to fill a section.
State actor — economic profile
GCC
A body whose members' economies rest on the same infrastructure and whose energy policies have just diverged.
The UAE withdrew from OPEC and OPEC+ effective 1 May 2026; other members remain
Energy policy cohesion
Common exposure, separate decisions
Every member depends on the same waterway, and four of the six have no alternative to it at all. That shared exposure has not produced a shared energy policy, and the module treats the gap between common vulnerability and divergent response as one of its central observations.
Non-state actor — war economy
Houthi movement
An actor with no economy in this system and decisive influence over one of its two sea lanes.
None as a producer or consumer; influence is over transit
Economic role
Transit as leverage
The movement produces nothing the module tracks and affects nearly everything it tracks, because the cost of moving Saudi barrels to Asia is set partly by whether Bab el-Mandeb is usable. The rerouting chain is authored in P3.
State actor — economic profile
Pakistan
No material role in the Gulf's commodity or shipping systems; present here through a defence instrument and a mediation venue.
None material
Role in the module's energy system
Why the economy block is nearly empty
Pakistan is an energy importer with real exposure to Gulf supply, and that exposure is a consumer-side dependency this module treats in its impact chains rather than on an actor record. It is not a producer, a transit state or a chokepoint party in this system.
State actor — economic profile
Türkiye
No material role in the Gulf's commodity or shipping systems; present here through a defence instrument.
None material
Role in the module's energy system
Why the economy block is nearly empty
Türkiye is a transit state for Iraqi crude through Ceyhan, which is peripheral to this module and belongs to its logistics layer if anywhere. It is not a producer, a customer or a chokepoint state in the Gulf system, and this record does not invent an economic profile to fill a section.
State actor — economic profile
China
The system's largest single customer, and the reason the sanctions architecture has a practical ceiling.
Major buyer of both Iranian and Gulf Arab crude, and of Qatari LNG
Import exposure
Where the module's exposure chains end up
Most of the crude and LNG leaving the Gulf is bound for Asia, and China is the largest destination. The impact chains authored in P3 therefore terminate in Asian industrial and power demand rather than in European or American markets, and the module says so rather than defaulting to a Western frame.
State actor — economic profile
European Union
An exposed gas consumer and a sanctions authority — and nothing else in this system.
Henry Hub–TTF spread averaged $14.89/MMBtu in March 2026, up 83% on February
Gas price exposure
How the Gulf reaches European households
Liquefaction capacity lost at Ras Laffan is not replaced on the same timescale elsewhere, and the adjustment appears as a widened spread between American and European gas prices rather than as a physical shortage. That is the transmission path, and it is authored as an impact chain in P3.
State actor — economic profile
IAEA
No economic role whatever — and the file it verifies is the legal foundation of the sanctions architecture the Iranian economy now sits inside.
None
Economic role
Suspension of all enrichment and reprocessing — the very thing that cannot currently be verified
Verification requirement inside the reimposed measures
Why verification is an economic fact here
Iran's export restrictions, its banking exclusion and its counterparties' legal exposure all rest on a nuclear compliance question, and that question is currently unanswerable by the only body empowered to answer it. The module carries that as a structural condition rather than as a forecast: nothing here estimates when access might resume, what sanctions relief would follow, or what either would do to a price.
Evidence and grading
- Exposure
- How strongly this part of the economy is exposed to conflict developments. An assessed exposure class, not a price forecast and not a probability.
- Confidence
- How well established Vigil considers this assessment to be. It is not a measure of how badly the economy is affected.