The immediate losers from the shock to shipping through the Strait of Hormuz are Saudi Arabia and the wider Gulf oil producers. Their export system is the one physically disrupted, militarily exposed, and commercially stranded by the war. The Strait normally carries about 20 million barrels of oil per day, roughly one-fifth of global petroleum consumption and about a quarter of seaborne oil trade. When the conflict escalated, flows through the chokepoint collapsed dramatically, with tanker traffic falling by more than 80 percent during the peak of the disruption. Saudi Arabia is the largest exporter relying on this corridor, accounting for roughly 37% of crude shipments passing through Hormuz, followed by Iraq, the UAE, Iran, and Kuwait. With attacks on shipping and energy infrastructure spreading across the Gulf, the region’s export system has effectively become a battlefield. Saudi Aramco has warned that a prolonged closure would have “catastrophic consequences” for global oil markets (of which they must mean their own) and Gulf governments have begun openly questioning the long-standing arrangement under which Washington was supposed to guarantee the security of their energy exports. Even proposals for naval convoy systems would restore only a fraction (10%) of normal tanker traffic, leaving a hard physical ceiling on how much crude the region can move. Saudi Arabia has attempted to redirect some exports through its East-West pipeline to the Red Sea port of Yanbu, bypassing Hormuz entirely, but the system can carry only about 5 million barrels per day, far below the kingdom’s normal export capacity of roughly 7–8 million barrels per day. As a result, even with maximum use of this pipeline network, a large portion of Gulf oil production remains effectively trapped behind the bottleneck created by the war.

While Gulf production is constrained, rival producers are either continuing to sell or are positioning themselves to capture the gap. Russia has seen a surge in energy revenues as higher prices and shifting trade flows boost its exports to Asian buyers. Iran, despite being at the center of the war, has continued exporting crude. Its key export hub at Kharg Island, responsible for around 90% of Iranian oil exports and capable of loading up to 2 million barrels per day, remains critical to shipments that still reach international markets, primarily China. The United States as we have shown is also positioned to benefit from the disruption. Government forecasts, which prior to the war predicted declining production, now expect production to climb further to roughly 13.8 million barrels per day by 2027 as higher prices encourage additional drilling.

U.S. capital markets are already responding to this shift. Financial institutions are investing in new tanker capacity scheduled for delivery later in the decade, and Washington has assembled a multi-billion-dollar insurance program to keep oil shipments moving through risky waters. One example is the reported order by JP Morgan-linked interests for three new Suezmax crude tankers at South Korea’s Samsung Heavy Industries, vessels expected to be delivered by February 2029. Industry reporting noted that the deal reflects expectations that “long-term geopolitical tensions and tighter shipping supply” will sustain demand for large crude carriers capable of moving oil outside the most vulnerable Gulf routes. At the same time the U.S. government has backed a $20 billion maritime insurance and reinsurance program to stabilize tanker traffic through dangerous waters such as the Strait of Hormuz. Taken together, these moves show that major financial actors are not treating the disruption as a short-lived crisis but are allocating capital on the assumption that global oil flows will remain unstable long enough for non-Gulf suppliers to expand their market share.

Analysts estimate that the conflict has already removed around 10 million barrels per day of production across Gulf countries, one of the largest disruptions in modern oil markets. Because restarting large oil fields can be complex and risky, some wells may never return to their previous productivity even after the conflict ends. In effect, geopolitical disruptions can transform a short-term export blockage into long-term reductions in global oil capacity, tightening supply and raising the baseline price of energy worldwide.

The stakes are enormous because Asia dominates demand for Gulf oil. Nearly 90% of crude shipped through the Strait of Hormuz is destined for Asian markets, with China alone receiving about 38% of the total and India roughly 15%. India’s dependence on Middle Eastern oil makes it particularly vulnerable to disruptions from the Iran war. The country consumes about 5 million barrels of oil per day and imports roughly 80–85 % of its crude, with around 55–60 % of those imports coming from Persian Gulf producers.

As Gulf supply becomes more uncertain amid the Iran conflict, U.S. officials and energy companies are seeking to capture a larger share of India’s import market, potentially redirecting a portion of the country’s roughly 3 million barrels per day of Middle Eastern crude imports toward American exports of which it has already captured about $4.5 billion in purchases in the first half of 2025, amid the escalating enforcement of sanctions against Russian “shadow fleet tankers” contributing to a 24% year-on-year rise in India’s imports from the United States.

For decades the political foundation of the energy system rested on the petrodollar arrangement, in which Gulf oil, especially Saudi exports, was sold largely in U.S. dollars and recycled through American financial markets. But the rise of shale production has changed that balance. The United States has become both a major oil exporter and the world’s largest exporter of liquefied natural gas, putting it into direct competition with the Gulf producers that once formed the backbone of the American-led energy order. Of course in capitalist competition, alliances built around yesterday’s market conditions can quickly give way to rivalry once the structure of production changes.

Saudi Arabia has responded to this shifting landscape by diversifying its political and economic relationships. China has become the largest buyer of Gulf crude and a growing diplomatic player in the region, mediating the 2023 Saudi-Iran rapprochement.

Just as the October 7, 2023, massacre, carried out by Hamas and the Islamic Jihadist group under Iranian mandate, aimed to sever the Abraham Accords between Israel and the UAE, and their possible extension, so today’s US and Israeli war on Iran aims, among other things, to sever relations between Iran and Saudi Arabia, sponsored by Chinese imperialism. Perhaps the UAE’s adherence to the Abraham Accords is the reason why, at least in the first week of the war, Iran launched more missiles and drones against this country than against Israel.

While the conflict is benefiting the US oil industry, it is also harming the Gulf countries, albeit to a different extent for each country. Saudi Arabia alone has reportedly reduced production by around 2–2.5 million barrels per day, down from 10–10.9 million barrels per day prior to the war. while the United Arab Emirates, Kuwait, and Iraq have also cut output, bringing total regional reductions to more than five million barrels per day. As Gulf exports shrink, producers outside the region, particularly the United States, Russia, and even Iran itself, are positioned to fill the gap.

From a broader economic perspective, the war in Iran reflects the pressures of a global energy market marked by intense competition and periodic oversupply. With world production exceeding 100 million barrels per day and major producers fighting for access to the fastest-growing Asian markets, geopolitical conflict increasingly intersects with commercial rivalry. The struggle over shipping routes, sanctions, and energy diplomacy is therefore not merely a regional dispute but part of a larger contest over who controls the future flows of oil in the world economy fundamentally shaped by monopolistic dynamics which shapes the imperialist conflicts waging the world over as capitalism desperately workers to maintain its profit rates.