Soaring Energy Costs Threaten Political Stability Worldwide

Three weeks into Operation Epic Fury, the U.S.-Israeli military campaign against Iran has triggered a global energy crisis that is rapidly metastasizing into a political one. With crude oil above $100 a barrel, gasoline prices climbing daily, and the Strait of Hormuz — the chokepoint for one-fifth of the world's oil — effectively shut down, governments on every continent face a common threat: voters furious about the cost of filling their tanks, heating their homes, and feeding their families [1].

The crisis represents the single largest disruption to global oil trade in recorded history, and its political aftershocks are only beginning.

The Numbers Behind the Crisis

The scale of the supply disruption is staggering. Before the February 28 strikes, WTI crude oil traded at roughly $67 per barrel. By mid-March, Brent crude had surged past $106 — a spike of more than 40 percent in less than three weeks [2]. Iran's Islamic Revolutionary Guard Corps has vowed that "not a litre of oil" will pass through the Strait of Hormuz, and tanker traffic has collapsed by over 90 percent [3].

Source: FRED / U.S. Energy Information Administration

Data as of Mar 11, 2026CSV

The impact has cascaded directly to consumers. The U.S. national average for regular gasoline has jumped from $2.94 per gallon in late February to $3.72 as of March 16, with California already exceeding $5.20 [4]. Diesel, the lifeblood of freight and agriculture, has surged from $3.63 to $4.65. In Southeast Asia and Africa, the pain is even sharper: Cambodia has seen a 68 percent increase in fuel prices, Vietnam 50 percent, and Nigeria 35 percent [2].

Source: FRED / U.S. Energy Information Administration

Data as of Mar 17, 2026CSV

Liquefied natural gas prices have jumped nearly 60 percent since the conflict began, compounded by Qatar's decision to halt LNG production after Iranian drone attacks [2]. Europe, which entered 2026 with gas storage at just 46 billion cubic metres — compared to 60 bcm in 2025 and 77 bcm in 2024 — is particularly exposed. French and German storage levels have fallen to roughly 22 percent, with the Netherlands at a precarious 9 percent [5].

The American Political Earthquake

In the United States, the energy price surge has collided with the Trump administration's core "affordability" message in ways that are already reshaping the political landscape ahead of the November midterm elections.

A Quinnipiac University poll from March 9 found that 56 percent of voters oppose U.S. military action against Iran, with only 36 percent approving of Trump's handling of the conflict [6]. More ominously for the White House, 63 percent of voters say they are concerned about gas prices — and 74 percent oppose sending ground troops to Iran. Trump's overall approval rating has slid to the high 30s, with independents breaking decisively against the war at 61 percent [7].

"The administration's foreign policy actions have collided directly with the affordability message," said Heidi Crebo-Rediker, a senior fellow at the Council on Foreign Relations [1].

The political fallout has fractured Trump's own coalition. Prominent MAGA figures including Tucker Carlson and Representative Marjorie Taylor Greene have condemned Operation Epic Fury as a betrayal of "America First" principles. Joe Kent, a decorated combat veteran who served as director of the National Counterterrorism Center, became the first senior administration official to resign over the war, accusing Israel of pressuring the president into a conflict against a nation that posed "no imminent threat."

Democrats sense an opening. A recent Politico poll showed 37 percent of adults believe Democrats are more concerned about protecting them from rising energy prices, compared to just 25 percent for Republicans [8]. Democratic candidates who won key races in New Jersey and Georgia in 2025 ran heavily on electricity costs, and the party is preparing to make energy affordability a central plank of its midterm strategy.

Energy Secretary Chris Wright's March 15 admission that there are "no guarantees" oil prices will fall soon — even as the administration insists the war will end "in a few weeks" — has done little to quell anxiety within Republican ranks [9].

Europe: Ghosts of 2022

For European leaders, the Iran crisis carries an unmistakable echo of the energy shock that followed Russia's 2022 invasion of Ukraine. But the continent's defenses are weaker this time around.

Wholesale gas prices in the UK nearly doubled within a single week of the strikes beginning. The European Council convened an emergency session on March 16-20 to debate measures to cut energy prices, with the EU considering interventions reminiscent of the price caps and windfall taxes deployed during the Ukraine crisis [5][10].

The Bruegel think tank estimates that the Iran war could reduce eurozone growth by 0.5 percentage points and push inflation above 4 percent year-on-year if the conflict persists for several months [10]. Capital Economics projects oil could reach $130 per barrel in the second quarter under a prolonged-conflict scenario [2].

The timing is brutal. European economies were only beginning to recover from years of stagnant growth, and rising energy costs threaten to tip several member states back toward recession. The political consequences are already materializing: France, which faces elections within the next two years and was already grappling with inflation-driven unrest, faces renewed pressure on President Macron's government.

European leaders have also near-unanimously rejected Trump's demands to send warships to help reopen the Strait of Hormuz, citing the Ukraine war as their priority and questioning why they should join a conflict they never endorsed. This refusal has deepened the transatlantic rift but also left Europe more exposed to the economic fallout, since it has no independent capacity to restore the flow of energy through the strait [11].

The Developing World: A Slow-Motion Catastrophe

While the political dynamics in Washington and Brussels dominate headlines, the most severe human consequences of the energy price shock are unfolding in the Global South.

An estimated 30 to 40 percent of the world's traded nitrogen fertilizers transit the Strait of Hormuz. With the waterway closed during Northern Hemisphere spring planting season, urea prices have already surged 30 to 77 percent since the conflict began [12]. The Project Syndicate analysis by Bram Govaerts and Sharon Burke warns that a prolonged disruption could trigger a global food crisis, with the most devastating impacts in sub-Saharan Africa and South and Southeast Asia — regions where food prices typically begin rising within a month of global increases [13].

Zimbabwe has seen fuel prices jump 16.5 percent in March alone, with similar spikes across Uganda, Kenya, and South Africa, where a further fuel price hike is expected in April [14]. In these nations, where households spend a far higher share of income on food and fuel than their counterparts in wealthy countries, the price shock carries an acute risk of social unrest.

The historical pattern is well-documented. The 2007-2008 food price crisis triggered riots in more than 30 countries. The 2010-2011 commodity price spike was among the catalysts for the Arab Spring. The 2022 energy crisis contributed to the collapse of Sri Lanka's government and mass protests from Ecuador to Indonesia.

"Oil pricing remains a potent geopolitical and domestic political weapon affecting global leadership stability across multiple continents simultaneously," David Sandalow of Columbia University's Center on Global Energy Policy observed [1].

Stock Markets and the Recession Question

Beyond the pump and the ballot box, the energy shock is reverberating through global financial markets. Since February 28, the New York Stock Exchange has fallen 6 percent, Tokyo's Nikkei 225 has plunged 11 percent, and the Saudi Tadawul has dropped 9.6 percent [2]. Global stocks overall have declined 5.5 percent, with Asian markets — heavily dependent on Gulf energy imports — absorbing the worst losses.

Mortgage rates in the United States have climbed to their highest levels of 2026, with the 30-year fixed rate reaching 6.11 percent as 10-year Treasury yields surge above 4.21 percent on inflation fears. The Federal Reserve, which meets March 17-18, is expected to hold rates steady, but prolonged energy inflation could force its hand [15].

GDP forecasts have been revised sharply downward. If the conflict extends for several months, economists project eurozone growth could slow to just 0.5 percent, China's growth could fall below 3 percent, and even the relatively insulated U.S. economy would see growth moderate to around 2.25 percent [2]. A $130-per-barrel oil price scenario in Q2 would raise the probability of a global recession to levels not seen since 2020.

Emergency Responses and Their Limits

Governments have not stood idle. The International Energy Agency has authorized an unprecedented release of 400 million barrels from member nations' strategic reserves — more than double the 2022 Ukraine-crisis release. The Trump administration is contributing 172 million barrels from the U.S. Strategic Petroleum Reserve [16].

But analysts caution that strategic reserves are a stopgap, not a solution. "Strategic oil release may calm markets but cannot fix Hormuz disruption," Al Jazeera reported [17]. The reserves buy time — weeks, perhaps a couple of months — but they cannot replace the roughly 20 million barrels per day of oil and petroleum products that normally transit the strait.

The Trump administration has also invoked the Defense Production Act to restart shuttered oil drilling operations along the California coast, a move that has triggered immediate legal challenges and a constitutional showdown over federal emergency powers. Even if the legal battles are resolved, new production would take months or years to come online — far too late to affect the current crisis.

A French-led international naval escort coalition is forming, but mine-clearing operations in the strait could take weeks or months, and ongoing Iranian attacks on commercial shipping make escort operations dangerous and logistically complex.

The Deeper Vulnerability

The Iran crisis has exposed a structural vulnerability that predates this particular conflict. Despite decades of rhetoric about energy independence and transition, the global economy remains profoundly dependent on a narrow waterway controlled by a single regional power.

"The post-oil world remains far in the future," Sandalow said. "We're in the early to middle stages of an energy transition" [1].

For political leaders worldwide, the lesson is both immediate and long-term. In the short run, few forces erode public trust and political stability faster than rising energy and food costs. In the longer term, the crisis strengthens the case for accelerated diversification of energy sources — a case that will mean little to voters struggling to afford their next tank of gas.

The political aftershocks of this energy crisis are still building. With no ceasefire in sight, the Strait of Hormuz paralyzed, and strategic reserves being drawn down at record pace, the question is not whether soaring energy costs will reshape the political landscape — but how dramatically.