US threats to target Iran's energy infrastructure in the absence of a deal are raising the risk of an unprecedented supply shock in global energy markets, particularly given the region's critical role in oil and liquefied natural gas (LNG) flows.
US President Donald Trump threatened to destroy "every bridge and power plant in Iran" if the Strait of Hormuz is not reopened by Tuesday night at 8 pm ET (0000 GMT Wednesday).
In his latest statement, Trump claimed on Monday that American forces could "take out" the entire nation of Iran in just a single night. "The entire country could be taken out in one night, and that night might be tomorrow [Tuesday] night," Trump told reporters.
The Israeli army also warned Iranians to avoid using trains and to stay away from areas near railway lines nationwide on Tuesday.
Iranian officials, in response, signaled that the conflict would continue until deterrence is restored, vowing to push back until future attacks are prevented.
The escalating rhetoric on both sides amplified concerns that Washington could directly target Iran's energy infrastructure, a scenario that could deepen global supply disruptions and trigger significant shocks across energy markets.
- 'Strike on energy infrastructure could take years to reverse'
Osama Rizvi, an analyst at US-based Primary Vision told Anadolu that current geopolitical tensions are already exerting a stronger impact on oil supply than past crises.
Oil prices could potentially surge to as high as $200 per barrel, causing significant damage to global markets, Rizvi warned.
He noted that force majeure declarations have already been reported in some Gulf countries, while LNG supply disruptions are affecting large parts of the global market.
A large-scale US strike on Iran's energy infrastructure could take years to reverse in terms of restoring production, with particularly severe consequences for energy-importing developing economies and major Asian markets, Rizvi warned.
"However, markets have yet to fully price in these risks," Rizvi said, highlighting that uncertainty, rather than outright panic, is dominating sentiment, leading to elevated and unpredictable volatility in energy markets.
He added that while any de-escalation could limit the rally, current developments point to a structural shift in global energy dynamics.
"The new risk environment in energy markets is something we will have to factor in, and the era of cheap energy may now be over," he said.
- 'Alternative routes are lacking'
Rizvi also underlined Europe's growing vulnerability in energy security, noting that reduced Russian supply and limited alternatives have increased reliance on a smaller pool of suppliers.
This could accelerate investment in pipelines and infrastructure to diversify routes and reduce dependence on key chokepoints such as the Strait of Hormuz and Bab el-Mandeb, Rizvi said.
"But it is important to note that, as of today, there are no practical alternatives that can bypass or replace the flows passing through the Strait of Hormuz," he added.
The International Energy Agency's decision to make 400 million barrels of emergency oil stocks available may have limited impact on curbing prices, he said.
These reserves are not directly injected into the market and still need to be purchased, while logistical constraints and elevated war-risk insurance costs remain key barriers, he explained.
In addition, differences between crude grades and refinery configurations continue to complicate efforts to ease market tightness, he said.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
