NEW YORK — Global leaders are grappling with a deepening energy crisis, as stopgap measures deployed to contain the rising cost of oil and gasoline prove inadequate against the backdrop of the Iran war. Since the conflict began, a record amount of oil has been taken off the market, with tankers full of crude stranded in the Persian Gulf and critical infrastructure like refineries, pipelines, and export terminals damaged by military strikes.
The Scale of Disruption in the Persian Gulf
The Strait of Hormuz, a vital chokepoint at the mouth of the Persian Gulf, typically sees the passage of roughly 15 million barrels of crude oil and 5 million barrels of oil products daily, accounting for approximately 20% of global oil consumption, according to the International Energy Agency (IEA). This critical transit has been severely disrupted.
Adding to the crisis, some oil-producing nations in the Middle East have been forced to halt production, unable to ship fuel out of the Gulf due to full storage tanks. This has removed an additional 10 million barrels per day from the market, the IEA reported. Compounding the issue, the eight countries surrounding the Persian Gulf, which collectively hold about 50% of global oil reserves, are unable to deploy their usual emergency response. Jim Krane, an energy research fellow at Rice University’s Baker Institute, noted that Saudi Arabia typically steps in to bring spare oil to market to stabilize prices. However, Krane stated, “all of that spare capacity is also bottled up inside the Persian Gulf right now and it can’t get to market either. So the main emergency response system that we have is also blocked.”
Global Response: Incremental Patches Fall Short
In an attempt to alleviate consumer pain, President Donald Trump and other heads of state have initiated various measures to inject more oil into the market. A coalition of 32 International Energy Agency member nations began releasing the largest volume of emergency oil reserves in history, totaling 400 million barrels. President Trump has also tapped into the U.S. Strategic Petroleum Reserve, lifted sanctions on Russian and Iranian crude, and temporarily waived the Jones Act, a maritime law governing shipping between U.S. ports.
Despite these significant maneuvers, crude oil has surpassed $100 a barrel, and gasoline is selling for an average of $4.06 a gallon in the U.S. Experts contend that these stopgap efforts, while helpful, are not sufficient to replace the vast quantities of oil stranded or otherwise removed from the market. Mark Barteau, a professor of chemical engineering and chemistry at Texas A&M University, described these actions as “incremental.” He elaborated, “You’re talking about these different patches being at the level of maybe 1 to 2 million barrels a day each, and you’ve got to get to 20, so it’s hard to see those actually adding up to the numbers that are needed. And then the question is, how long can you sustain those?”
Limited Impact of Specific Measures
An analysis of individual measures reveals their limited efficacy. Saudi Arabia is utilizing its East-West pipeline, which runs from the Persian Gulf to the Red Sea, to transfer about 5 million barrels per day out of the Gulf. However, Michael Lynch, a distinguished fellow at the Energy Policy Research Foundation, noted that the nation was already using this pipeline, leaving little spare capacity to move oil from stranded tankers.
President Trump’s temporary lifting of sanctions on approximately 140 million barrels of Iranian oil, already in transit, did not add new oil to the market. Instead, it merely widened the pool of potential buyers, which in turn raised the oil’s price to Iran’s benefit, according to Daniel Sternoff, a senior fellow at the Columbia Center on Global Energy Policy. Sternoff remarked, “As soon as you are moving to waive sanctions on your adversary with whom you’re fighting a military conflict, to do something in their benefit, it just shows you that you are running out of options to try to prevent a rise in the price of oil.” The decision to lift sanctions on Russian oil, however, could have more impact, as Russia had been storing unpurchased oil in tankers, allowing those barrels to clear, Sternoff added.
The temporary waiver of the Jones Act, intended to allow foreign ships to transport goods between U.S. ports, could potentially ease natural gas prices by facilitating the shipment of liquefied natural gas from the Gulf Coast to New England. However, experts like Lynch do not anticipate it will significantly impact oil or gasoline prices, calling it “helpful, but not a game changer.”
U.S. Domestic Production Challenges
Despite being a major oil producer and exporter, the U.S. cannot instantly ramp up production to fill the global void. Barteau stated that the U.S. would need to nearly double its production to make up the global shortfall, a feat that would be impossible to achieve quickly. Increasing domestic production by even 1 million barrels per day, a significant achievement during the shale boom, would be difficult to duplicate. Lynch questioned the economic viability, asking, “If we run every drilling rig right now, what happens a week from now when the war is over and the price goes back down $20?”
Furthermore, halting U.S. oil exports would not necessarily lower domestic gasoline prices, as oil is traded on a global market. The U.S. also faces a refining mismatch: approximately 70% of its refineries are configured to process heavy, sour crude, while much of the oil produced domestically, particularly from the shale revolution, is light, sweet crude, according to the American Fuel and Petrochemical Manufacturers (AFPM). At the end of 2025, the U.S. produced about 13.7 million barrels per day of oil but processed about 16.3 million barrels per day, relying on imports to bridge the gap, as per the Energy Information Administration (EIA) and AFPM. Retooling domestic refineries would cost billions and require shutdowns, which would likely raise gasoline prices in the short term.
The IEA’s recent report underscored that “the resumption of transit through the Strait of Hormuz is the single most important action to return to stable oil and gas flows and reduce the strains on markets and prices.” While Lynch described the current situation as potentially the “biggest oil crisis ever,” he emphasized that the duration of the conflict is paramount. “If it goes on for another six weeks we get to be in some serious trouble,” he warned, highlighting the precarious state of global energy markets.
