The global energy landscape is in chaos, driven by the Iran war and the subsequent closure of the Strait of Hormuz, a critical shipping route for oil and seaborne gas. This geopolitical instability has led to shrinking fuel stocks, soaring prices, and a cascade of emergency measures adopted by countries worldwide. The International Energy Agency (IEA) has called for demand-reduction actions such as flying less and driving slower, while governments grapple with rising costs that threaten to destabilize economies.

The United States, having engaged in bombing Iran in late February alongside Israel, has threatened further strikes on Iranian oil infrastructure, potentially prolonging the conflict and driving fuel prices even higher. Despite the crisis, the US administration, under Donald Trump, has doubled down on its "drill, baby, drill" policy, expanding fossil fuel production and blocking renewable projects. Notably, the Trump administration announced a $1 billion payment to TotalEnergies to scrap plans for wind farms off the US east coast, redirecting investments into oil and gas. Trump has also criticized allies like the UK and France for not joining the campaign, urging them to buy US oil or "go get your own oil" from the Gulf.

Responses vary across other Western allies. The UK has urged calm and provided financial support for those using oil to heat homes, with Chancellor Rachel Reeves considering additional aid for vulnerable people but ruling out universal support. Australia has halved its fuel excise for three months and released a national fuel security plan, encouraging motorists to "only buy the fuel you need." New Zealand has introduced weekly cash payments for nearly 150,000 families. Canada, however, has refrained from intervening to offset rising prices. The IEA has cautioned governments against blanket subsidies, advocating for targeted support instead.

The European Union has renewed calls for a faster transition to a clean, renewables-powered economy, though some member states are slowing this down. Italy delayed its coal phase-out, and Germany's Chancellor Friedrich Merz suggested keeping coal plants online longer and accelerating gas-fired plant construction. Several EU governments have implemented fuel subsidies and tax cuts. The European Commission has proposed weakening its carbon price mechanism and mandating lower taxes on electricity to reduce reliance on imports. While most European nations are reluctant to impose harsh demand-reduction measures, Slovenia has begun rationing fuel, and Lithuania halved domestic train ticket prices.

Asia has been particularly hard-hit, witnessing a resurgence of coal. India has ordered coal-fired power plants to run at full capacity, while Japan and South Korea have brought less-efficient coal plants back online or delayed phase-outs. Bangladesh, Thailand, and the Philippines are also increasing electricity output from coal. South and Southeast Asian countries have implemented significant demand-reduction efforts: Sri Lanka introduced fuel rationing and a four-day working week; Vietnam urged working from home; and Thailand promoted less air conditioning, urging officials to wear short-sleeved shirts and reducing government office temperatures. China, with its vast energy production and strategic reserves, is less exposed but its state-run refineries avoid Iranian crude, though independent "teapot" refineries continue to process it.

African countries, largely net importers of refined oil products, are vulnerable to surging fuel and fertilizer prices. Ethiopia, which imports all its petrol from the Gulf, is particularly exposed. Emergency measures include South Africa reducing its fuel levy, Tanzania strengthening strategic fuel reserves, Ethiopia introducing a special fuel subsidy, and Zimbabwe planning increased ethanol blending. South Sudan and Mauritius have rationed electricity for non-essential uses.

In South America, where state-subsidized fuel is common, right-wing governments have mostly resisted calls to suppress price rises. Chile's new president, José Antonio Kast, hiked fuel prices to align with global rates but froze public transport fares. Argentina delayed a scheduled increase in liquid fuel and carbon dioxide taxes and will allow voluntary blending of ethanol into gasoline. Brazil is partly shielded by its large vehicle fleet, which can run on homegrown sugarcane ethanol.

The Iran war has had profound global economic consequences. Brent crude prices surged past $109 a barrel, reversing earlier drops. Stock markets across Asia and Europe plummeted, with Japan’s Nikkei falling 2.4% and South Korea’s Kospi tumbling 4.8%. In the UK, government borrowing costs rose, and fears of inflation from higher energy costs intensified. The US dollar gained as investors sought safe haven assets. Consumers are directly impacted: the Bank of England warned 1.3 million UK homeowners face higher mortgage payments, and petrol and diesel prices in the UK saw record monthly jumps in March. Average petrol rose 20p to 152.83p per litre, and diesel soared 40p. Drivers collectively spent an additional £600 million, with a single station in central London selling diesel for 299.9p per litre.

Adding another layer of complexity, the Iran and Ukraine wars are increasingly intertwined, creating an arc of instability across Europe and the Middle East. Russia has been using Iranian-made Shahed drones in Ukraine since September 2022, and now Moscow is reportedly returning the favor with intelligence, targeting, and drones for Iran following the US-Israeli assault. Ukraine's President Volodymyr Zelenskyy has toured the Middle East, securing agreements for drone and anti-drone technology and training, aiming to become a supplier of battlefield-tested technologies and gain more leverage with Washington.

The conflicts also converge through global energy markets. The closure of the Strait of Hormuz favored Russia by spiking oil and gas prices, providing an economic lifeline amidst sanctions. The Trump administration eased some restrictions on Russian oil exports, and Asian countries, affected by the Strait closure, are now purchasing Russian oil. In response, Ukraine has intensified strikes on Russian energy infrastructure, reportedly halting up to 40% of Russia’s oil export capacity. European states express anxiety about being drawn into a spiraling Middle East conflict, with leaders acknowledging the interlinkage between the wars. Despite this, the Trump administration has been reluctant to acknowledge the connection, maintaining preferential treatment for Moscow and even allowing a Russian oil shipment to bypass the US blockade on Cuba, while pressing Kyiv to scale back strikes on Russian oil facilities.

Internally, Iran faces immense military pressure from US and Israeli airstrikes targeting Revolutionary Guard, Basij units, army, and police facilities. In response, desperate Iranian leaders launched a nationwide recruitment drive, urging citizens to "defend the country's soil." Mass text messages and state television appeals invite people to join a national mobilization campaign against "the American-Zionist enemy." The Islamic Revolutionary Guard Corps is enlisting volunteers, including children as young as 12, for roles ranging from patrols and security checkpoints to tending the wounded and providing financial support. Human Rights Watch has condemned the recruitment of children under 15 as a war crime. While an online portal claims over five million registrations, the actual number remains unverified, and public sentiment is mixed, with some willing to fight only under specific conditions of ground invasion.

Diplomatic efforts appear fraught. JD Vance's peace talks with Iran faced a setback after Kamal Kharazi, Iran's former foreign minister and a key figure in planning a summit, was injured in US-Israeli airstrikes in Tehran. Iranian officials condemned these strikes as an attempt to derail diplomacy, despite Donald Trump's claims of wanting to wind down the conflict. Trump has stated the war is "nearing completion" after four weeks of strikes and threatened to bomb Iran "back to the Stone Ages" if a peace deal isn't reached, even suggesting bombing desalination plants, a potential war crime. He also claimed US diplomats were in ongoing peace discussions with "more reasonable" Iranian officials, a claim consistently denied by Iran. Trump urged allies reliant on oil from the Strait of Hormuz to "build some delayed courage" and "go take it," while simultaneously stating the US does not need their oil. The future of global stability remains uncertain, with experts warning of the potential for broader systemic changes due to these interconnected conflicts and the unpredictable impact of shortages on a wide array of states.