Energy markets are adapting to the Iran war as a ‘forever conflict’ while oil producers keep supplies flowing and avoid ‘mutually assured destruction’

Oil markets are adjusting to the Iran war without a decline in shipments from the Persian Gulf. Despite Iran stepping up attacks on tankers in the Strait of Hormuz, oil flows from the region are currently above prewar levels.

Supply continues despite tanker attacks

The Strait of Hormuz remains a focus of concern for energy markets because tankers are facing increased attacks. However, the disruption has not translated into lower regional oil flows. Instead, supplies are moving at levels higher than before the war.

The continued flow reflects the position taken by Persian Gulf oil producers. They have so far avoided crossing certain red lines, allowing shipments to continue while the conflict develops.

A fragile balance for energy markets

The current situation highlights a gap between heightened security risks and actual oil availability. Tanker attacks have raised pressure around the region, but producers’ restraint has prevented the supply flow from falling below prewar levels.

That balance is not presented as permanent. The decision by Persian Gulf states to avoid certain red lines applies “for now,” leaving the market’s position tied to how the conflict evolves and whether that restraint continues.

What to watch next

For energy markets, the key issue is whether oil producers can keep supplies moving through the Strait of Hormuz despite the attacks. At present, regional flows remain above prewar levels, but the situation continues to depend on the limits observed by Persian Gulf states.