Trump could attack Iran in days — what's at stake for the oil market

Core Viewpoint - A potential full-scale war between the United States and Iran could lead to soaring oil prices and an economic downturn, with a significant military buildup in the Middle East and a decision on military action expected within 10 days [1] Oil Market Impact - Oil prices have increased nearly 6% this week as traders react to the heightened risk of military action, with fears centered on the disruption of oil flows through the Strait of Hormuz, a critical chokepoint for global oil trade [3] - More than 14 million barrels per day of oil and condensates passed through the Strait of Hormuz in 2025, accounting for one-third of total worldwide seaborne oil exports [3] Regional Oil Flow - Approximately 75% of the oil that transits through the Strait of Hormuz is destined for China, India, Japan, and South Korea [4] Military Preparedness - Iran's Revolutionary Guard has conducted military exercises that temporarily closed the strait, indicating readiness to shut it down if ordered by Iranian leadership [4] - Experts suggest that Iran could disrupt oil flows through the Strait of Hormuz for a longer duration than many market participants anticipate [5] Worst-Case Scenario - A potential conflict could resemble the 52-day air campaign against Houthi militants in Yemen, but with greater implications due to Iran's superior weaponry and coastline advantages [6] - Iran possesses significant stockpiles of mines and short-range missiles that could threaten commercial traffic in the strait [6] Insurance and Shipping Concerns - Insurers, such as Lloyd's, may refuse to cover tankers operating in the Strait of Hormuz under conditions of heightened military tension [7]