Oil has become one of the clearest measures of geopolitical anxiety. When governments threaten each other, tankers are delayed, shipping routes are blocked or production comes under pressure, the consequences appear almost immediately in the price of crude. The latest surge above $100 a barrel during the US-Iran war is therefore not simply another market movement. It is a reminder that the global economy remains dangerously exposed to political decisions made thousands of kilometres away.
The history of this century makes the pattern difficult to ignore. Oil rose above $147 a barrel in 2008 before collapsing to around $36 as the global financial crisis destroyed demand. In 2011, the Arab Spring pushed Brent towards $127. In 2012, sanctions on Iran helped keep prices above $100, while the expansion of American shale production later transformed the market. Russia’s invasion of Ukraine sent crude towards the levels seen during the 2008 shock. Then came the extraordinary reversal of 2020, when WTI briefly fell below zero as the pandemic paralysed transport and overwhelmed storage capacity.
Now the world is confronting another version of the same problem.
The US-Iran conflict has placed the Strait of Hormuz at the centre of the energy crisis. The waterway carries a substantial share of global oil supplies, meaning that military confrontation there immediately becomes an economic problem for countries far beyond the Middle East. Brent reached $126.41 a barrel in April before falling as strategic reserves were released, demand weakened and hopes of a diplomatic settlement emerged.
That temporary relief has proved fragile.
The renewed escalation demonstrates the fundamental weakness of relying on political optimism to stabilise an energy market. A ceasefire, memorandum or diplomatic breakthrough can bring prices down rapidly. A single military escalation can send them back up. For import-dependent economies, this volatility is not an abstract financial concern. It affects transport costs, electricity generation, food prices, inflation and household purchasing power.
Pakistan is particularly vulnerable to this cycle.
When international crude becomes more expensive, the country does not merely pay more for fuel. Higher petroleum costs spread through the economy because transportation is embedded in almost every supply chain. Farmers face higher costs for machinery and inputs. Businesses pay more to move goods. Electricity and industrial production can become more expensive. Ultimately, consumers carry much of the burden.
This is why oil security cannot be treated merely as a question of purchasing enough crude. It is a question of economic resilience.
The repeated shocks also expose the limits of the traditional global energy system. For decades, countries have understood that the Middle East is strategically important, yet the world has continued to depend heavily on a handful of vulnerable shipping routes and producing regions. The lesson from every major oil crisis is the same: concentration creates vulnerability.
Diversification is therefore no longer an environmental slogan alone. It is an economic and national-security necessity.
Renewable energy, electric transport, domestic energy production, better public transportation and greater efficiency can reduce exposure to international oil shocks. No single alternative will eliminate dependence on hydrocarbons overnight. But every reduction in oil dependence gives governments greater freedom when geopolitical crises erupt.
There is also a larger lesson for global diplomacy. The enormous swings in oil prices demonstrate that war has economic consequences long before it produces a final military outcome. A government may calculate that it can absorb the cost of confrontation but consumers, developing countries and vulnerable economies often cannot.
The world should therefore stop treating energy markets as passive spectators of geopolitics. They are part of the conflict itself.
The oil shocks of 2008, 2011, 2012, 2020, 2022 and now 2026 show that the next crisis will eventually come, even if its cause is different. The responsible response is not to predict the exact price of crude. It is to build economies that are less vulnerable when that price suddenly changes.
Oil may remain indispensable for years. But allowing every geopolitical crisis to become an energy crisis is a policy choice.
The real measure of energy security is not how cheaply a country buys oil when the world is calm. It is how well that country survives when the world is not.
Keywords: oil prices, US-Iran war, oil market volatility, Strait of Hormuz, global energy security, oil shocks, crude prices, Middle East conflict, Pakistan economy, energy geopolitics
Khalid Masood
About Author:
The author is a distinguished legal professional with a strong interest in budgetary, financial and auditing matters and may be contacted at info@asianburg.com
