Rystad Energy has published a report outlining what it expects to be the legacy of the Middle East crisis, or Iran war as it has also been dubbed, with signs that a more fragmented and security-focused energy sector may emerge from the largest-ever disruption to global oil supplies.
The crisis has pushed the market to face the flaws of a Middle Eastern centric global hydrocarbons supply and to tackle energy efficiency and supply resilience.
"Governments are prioritizing strategic petroleum reserves, liquefied natural gas (LNG) storage and fuel diversification. Energy security is no longer a temporary crisis concern, but a structural feature of a more unstable world," as per the introduction notes.
It underscored that "geopolitical fragmentation is also accelerating" and that the economies are not evolving into rigid Cold War-like blocs but more "selective alignments".
"Countries seek flexibility across competing powers rather than committing fully to one side", Rystad said, noting that China's large crude reserves are largely forestalling the impact of the crisis on the country.
Adding its own quantification of impact to a growing number of analyst predictions, it says that sustained oil prices around $110 per barrel would slow global GDP growth to about 2.5% in 2026, down from 2025's 3.4%.
Energy importers in Europe and Asia are facing weaker trade balances and currencies on top of surging bills for energy cargoes they obtain while inflation is now more likely to become problematic.
Importantly, in answer to what some analysts say is an unexpectedly subdued market reaction to the prolonged closure of the Strait of Hormuz, Rystad says this is largely down to very high reserves in place in the until-recently oversupplied market plus volumes of oil already at sea.
It says that for transformative structural change to energy markets to occur, as some expect, the crisis will need to endure for longer and it says the impact for economies has arisen more from tighter supplies of liquefied natural gas than for oil.
Rystad Energy's geopolitical risk index is now at its highest level ever, reflecting the severity of the US/Israel-Iran conflict and its wide-ranging impacts.
"The conflict has become another defining example of a world in which geopolitical shocks are more frequent, harder to contain, and increasingly capable of producing immediate global energy consequences," Rystad said.