The repercussions of the U.S. war with Iran could cut global oil demand 20 percent and natural gas demand 10 percent by 2050 as the ongoing Middle East conflict restructures energy markets, according to a new analysis.
In a report Wednesday, research firm Wood Mackenzie said the war — launched by the United States and Israel in late February and paused under a fragile ceasefire reached Tuesday — has upended global energy trade as Iran has proven its ability to wield control over the Strait of Hormuz: the narrow passage that roughly one-fifth of the world’s oil and gas moves through.
President Donald Trump this week threatened the obliteration of Iran if the country’s leaders didn’t open up the waterway. And after Trump floated the idea earlier this week of the United States charging tolls for ships seeking to transit the strait, the oil and gas sector has voiced its concerns about allowing Iran to charge tolls through the strait as a condition of peace talks.
In a new “conflict scenario” that assumes a major geopolitical escalation early this year, global oil demand would decline by about 9 percent in the near term because of supply outages, Wood Mackenzie said, and would take a few years to get to “pre-crisis” levels. After 2030, “structural shifts take hold” as countries hasten efforts to curb a reliance on imported fuels, the report said.
