By Patti Domm
Oil prices fell sharply on Monday afternoon after President Donald Trump said the Iran war will be over "very soon."
But even if the conflict with Iran ends shortly, it could take "a few weeks to months" to restore the majority of the region's energy production, says Daniel Yergin, vice chairman of S&P Global and a Pulitzer Prize-winning energy historian.
Saudi Arabia, Kuwait, and the United Arab Emirates have cut back on oil production in the last several days because shipping traffic through the Strait of Hormuz remains effectively blocked. Qatar's liquefied natural gas production is also offline.
Crude prices briefly surged to nearly $120 a barrel on Monday before retreating below $90 on Trump's comments that the military action is ahead of schedule. He later said the U.S. "won't relent" and that the U.S. hasn't yet "won enough" in Iran. Brent crude traded above $90 again Tuesday morning.
Barron's spoke with Yergin on Monday about the outlook for oil and liquefied natural gas prices, other infrastructure in the Middle East, and gasoline prices in the U.S.
An edited version of the conversation follows.
Barron's : Has there ever been a threat level like this to global energy supply?
Daniel Yergin: This is a historic disruption to world oil. There has never been anything of this scale. Even the oil crises of the 1970s, the Iran-Iraq war of the 1980s, Iraq's invasion of Kuwait in 1990 -- none of those come close to the magnitude of this disruption.
It isn't yet the nightmare scenario that would happen if this persisted for some time. But it is getting increasingly serious.
Significant energy infrastructure is under threat. What does this mean for the market?
People think of the strait in terms of oil, but you also have to think of it in terms of liquefied natural gas. Not only does 20% of the world's oil flow through the strait, but so does 20% of its LNG. Different parts of the world are highly dependent on energy products from the Gulf. Basically all of East Africa's products, such as jet fuel and diesel, come from the Gulf. A substantial part of Europe's jet fuel comes from the Gulf. But Asia is most affected because 80% Gulf oil and 90% of the region's LNG goes there.
A vast amount of infrastructure on the Arabian side of the Gulf is also at risk. It isn't just oil and gas, but industrial, water desalination, and financial. The Gulf countries are major players in the world's capital markets because of the size of their sovereign-wealth funds. The Iranians know that.
How will the market cope with shortages now that the strait is effectively closed and so much energy infrastructure is offline?
As prices go up, demand will go down. There are panicky prices and longer-term prices. We are already seeing panicky prices. Oil prices are up almost 70% from where they were before the U.S.'s military buildup in the region in January, and prices for LNG are up more than 90% in Asia and 75% in Europe (on Monday). As the shortfall continues, those prices will get bid up further.
We have already seen LNG tankers that were headed toward Europe changing direction and going to Asia, where prices are higher. Higher prices in Asia will act like a magnet drawing supplies from other parts of the world. Costs all along the supply chain are going up. An LNG tanker that would have cost $40,000 a day is now as high as $250,000 or $300,000 a day.
Many oil producers in the Gulf are shutting down production. How quickly can they restore operations when the war ends?
It takes time to bring the production back. Some will be able to come back more quickly than others, but this doesn't happen with lightning speed.
About 20% of production can be brought back online in a matter of days. Another 50%-60% could take a few weeks or months, depending on the state of the reservoir and how it was shut in. These numbers would vary by country and would depend on how well the reservoir had been maintained.
The strait isn't the only outlet for the Gulf. The Saudis have a pipeline system with a capacity of about seven million barrels a day that goes westward from the Persian Gulf to the Red Sea. The U.A.E. also has a pipeline that skirts the strait and comes out on the other side.
Would any short-term disruption in oil production have lingering effects?
If it is a couple of weeks, the world will get back to normal in the weeks that follow. If this goes on for a long period, then we start to move toward a nightmare scenario. That is the fear that a massive long-term shutdown in the Gulf would bring not only skyrocketing prices, but collapsing financial markets and recession.
Qatar's energy minister warned Friday that oil prices could soon reach $150 a barrel. Is that your view, too?
There is every reason to be concerned that oil prices could spike much higher if this persists for a long time. But the reason the U.S. and International Energy Agency established their strategic reserves was to deal with a serious crisis in the Gulf.
Gasoline is heading toward $4 a gallon. Will the Trump administration tap the Strategic Petroleum Reserve to contain the price increase?
If prices go up and the disruption continues, it is likely the U.S. Strategic Petroleum Reserve will be used. The president has made clear that he isn't a $4-a-gallon gasoline man. He has publicly said he likes his $50-a-barrel oil.
Who are the winners here, if any?
Russian President Vladimir Putin is the biggest short-term winner. Restrictions on Russian exports have been relaxed to compensate for the shortfall in oil from the Middle East. Russian crude that has been floating around at sea is now going to find a market. For example, prior to the conflict, India was stepping up its imports from the Middle East because it was cutting back on Russian oil. Now the seesaw is going in the other direction. Russian oil is also a quick way for China to make up for imports it isn't getting from the Middle East.
There will be many lessons learned from this crisis. What is one on your mind?
Energy security is also national security. That is a paramount lesson.
Write to editors@barrons.com.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 10, 2026 10:09 ET (14:09 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments