By : Shatha Kalel
The wars involving Iran and Ukraine are converging in an unexpected place: the fuel tanks of the ships that keep global trade moving. The consequences could reach far beyond energy markets.
For years, the world has learned to watch the price of crude oil whenever war erupts in a major energy-producing region. But the next economic shock may come from a less visible commodity: the fuel that powers the global shipping industry.
The wars involving Iran and Ukraine are now placing pressure on different parts of the international energy system at the same time. Conflict around Iran has disrupted maritime activity in the Gulf and increased uncertainty surrounding the Strait of Hormuz. Ukrainian attacks on Russian refineries, meanwhile, have reduced supplies of refined petroleum products from one of the world’s largest energy exporters.
The result is an emerging shortage of fuel oil, including the bunker fuels used by commercial vessels.
This may sound like a specialized problem for shipping companies. It is not. It matters because maritime transport is one of the foundations of globalization. Ships carry energy, grain, metals, machinery, vehicles, electronics and manufactured goods between continents. When the cost of moving those ships rises sharply, the economic effects can travel much further than the vessels themselves.
The numbers already point to significant pressure. Energy Aspects expects the global fuel-oil market to face a deficit of approximately 218,000 barrels per day in the third quarter of 2026, compared with a marginal deficit of only 6,000 barrels per day during the same period last year. Middle Eastern fuel-oil exports fell approximately 45 percent year-on-year between March and August. Russian fuel-oil exports have also declined sharply, falling to 591,000 barrels per day in August, compared with an average above 860,000 barrels per day in 2025.
Yet war is only part of the explanation.
Refiners themselves are responding to powerful market incentives. Crude oil produces several products, including gasoline, diesel, jet fuel and heavier fuel oils. When diesel offers substantially higher profit margins, refiners have an incentive to process more of the heavier components into higher-value products rather than leave them available for marine fuel.
This creates an unusual economic problem: the world can have crude oil and still experience a shortage of the particular refined fuel required by ships.
The consequences are already visible in major bunkering centres. In Singapore, the world’s largest marine-fuel hub, very-low-sulphur fuel oil had risen approximately 76 percent since the beginning of the Iran war, reaching nearly $825 per metric tonne by September 1. Fuel-oil inventories in Singapore, Fujairah and the Amsterdam-Rotterdam-Antwerp region were also around 30 percent below their three-year seasonal averages.
This is where an energy story becomes an inflation story.
Higher marine-fuel costs increase the expense of transporting goods internationally. Importers pay more to bring products into domestic markets. Manufacturers dependent on foreign components and raw materials face higher production costs. Retailers importing finished products encounter similar pressures. Eventually, businesses must decide whether to absorb those costs through lower profits or pass some of them to consumers through higher prices.
The Strait of Hormuz makes the situation particularly sensitive. Its importance lies not simply in the amount of energy passing through it, but in the extraordinary concentration of global energy flows within a narrow geographical corridor. A prolonged disruption does not require a complete closure to cause economic damage. Delays, security concerns, higher insurance premiums and uncertainty can raise costs even while ships continue moving.
History explains why this deserves attention. The 1973 oil crisis demonstrated how an energy disruption could contribute to inflation and economic weakness far beyond the Middle East. The Iranian Revolution in 1979 produced another major oil shock. More recently, the pandemic showed how transportation bottlenecks could generate shortages and price pressures across interconnected supply chains, while Russia’s invasion of Ukraine in 2022 demonstrated how quickly war involving a major commodity producer could affect energy and food markets worldwide.
The danger today is that these pressures emerge while policymakers have limited tools to address their source.
Central banks can raise interest rates to reduce demand, but monetary policy cannot repair a damaged refinery, produce additional bunker fuel or restore safe passage through a conflict zone. If transportation costs push inflation upward while geopolitical uncertainty weakens investment and consumption, economies could confront the particularly difficult combination of persistent inflation and slowing growth — the conditions that generate stagflationary pressure.
There is an even deeper risk.
Globalization was built partly on the assumption that goods could be transported across enormous distances cheaply, reliably and predictably. If shipping becomes persistently more expensive or insecure, companies may reconsider where they manufacture, where they purchase raw materials and how far their supply chains should extend. Low-margin trade could become uneconomic, while businesses may increasingly favour shorter and more resilient supply networks.
That would make this more than another temporary energy shock. It could become another force reshaping globalization.
For now, a global economic crisis is far from inevitable. Much depends on how long the conflicts continue, whether maritime traffic normalizes and how quickly refiners and alternative suppliers can respond.
But the warning is difficult to ignore.
The world is accustomed to asking what war will do to the price of oil. Perhaps the more important question now is what war will do to the cost of moving the world.
Because when the fuel powering global trade becomes scarce, the shock may begin at sea — but it will not end there.
Economic Unit – North America Office
Al-Rawabit Center for Research and Strategic Studies