{"id":1493,"date":"2026-04-08T16:13:21","date_gmt":"2026-04-08T08:13:21","guid":{"rendered":"https:\/\/curve-series.com\/?p=1493"},"modified":"2026-04-08T17:15:19","modified_gmt":"2026-04-08T09:15:19","slug":"energy-market-implications-of-the-u-s-iran-conflict","status":"publish","type":"post","link":"https:\/\/curve-series.com\/?p=1493","title":{"rendered":"Energy Market Implications of the U.S.\u2013Iran Conflict"},"content":{"rendered":"

Military Operation <\/span><\/b><\/span><\/h2>\n

On 28th<\/sup> February 2026, the United States and Israel launched a coordinated, large scale military operation against Iran, called Operation Epic Fury. The main purpose of this operation, as stated by the U.S., was to contain Iran\u2019s missile program and prevent Iran from acquiring a nuclear weapon, ultimately wanting to eliminate the threat Iran posed to the world. In retaliation, on 2nd<\/sup> March 2026, Iran effectively closed the Strait of Hormuz by threatening and attacking tankers passing through the strait.<\/span><\/p>\n

Global oil and gas supply suspended, spurring price volatility<\/span><\/b><\/span><\/h3>\n

20% of the world\u2019s Oil and Liquefied Petroleum Gas (LPG) tankers (roughly 20 million barrels per day) pass through the Strait of Hormuz. The closure of the Strait has essentially suspended 1\/5 of the world\u2019s oil and gas supply, resulting in a worldwide Oil and LPG supply crunch. <\/span><\/p>\n

As the most globally traded and internationally relevant benchmark for seaborne crude, the price of Brent is highly sensitive to such a global supply shock. Following the closure of the Strait, Brent Futures Q3 has surged by ~$20\/bbl since the closure of the Strait at the start of March.<\/span><\/p>\n

\"Brent<\/p>\n

\n

Figure 1. Brent Futures Q3 Source: Curveseries<\/a><\/span><\/p>\n

Regions unevenly affected by <\/span><\/b>FEI Propane\/ NWE Propane Swaps Q3 <\/span><\/b><\/span><\/h3>\n

Asia\u2019s LPG market is more import-dependent and less flexible than Europe\u2019s, making it highly sensitive to supply disruptions, particularly from the Middle East. Around 40\u201345% of China\u2019s<\/strong> <\/b>and up to 90% of India\u2019s<\/strong> <\/b>propane imports sourced from the region. In China, usage is mostly in propane dehydrogenation (PDH) plants, while in India it is more for residential consumption. Both of these uses have limited short-term alternatives, making propane demand in the East relatively inelastic.<\/p>\n

In contrast, Europe has more diversified supply, with only 10\u201320%<\/strong> of LPG imports coming from the Middle East and the majority sourced from the United States and other Atlantic Basin suppliers. Greater feedstock flexibility also allows European petrochemical producers to switch between propane and naphtha. As a result, the closure of the Strait of Hormuz, drives sharper price increases in Asian (FEI) propane, while European (NWE) prices respond more gradually. As a result, FEI\/NWE Propane Q3 spreads have risen overall since the beginning of the conflict.<\/p>\n

\n

\"FEI<\/p>\n

Figure 2. FEI Propane\/ NWE Propane Q3 Sources: Curveseries<\/a><\/span><\/p>\n

However, the price movement has not been completely upward, with it declined sharply in the first half of March. This can be attributed to a widening NWE naphtha\u2013propane spread, which improved the relative economics of propane as a petrochemical feedstock. As propane became more cost-competitive than naphtha, European crackers increased propane intake, strengthening regional demand and supporting NWE Propane prices. This demand-side uplift in NWE Propane Swaps, while FEI Propane Swaps remained comparatively weaker, led to a fall in the FEI\/NWE Propane spread.<\/p>\n

\"NWE<\/p>\n

Figure 3. NWE Naphtha\/ WE Propane Q3. Sources: Curveseries<\/a><\/span><\/p>\n

Conclusion<\/o:p><\/h2>\n

The tensions between U.S. and Iran have caused volatile spikes in crude oil and LPG prices due to the tightening of supply after Iran closed the Strait of Hormuz. However, the recent pullback in oil prices following ceasefire discussions highlights that these price spikes are highly sensitive to political developments and can reverse quickly once tensions ease.<\/p>\n","protected":false},"excerpt":{"rendered":"

Diving deeper into the volatile price spikes driven by geopolitical risk amid escalating U.S.\u2013Iran tensions.<\/p>\n","protected":false},"author":2,"featured_media":1498,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-1493","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights"],"yoast_head":"\nEnergy Market Implications of the U.S.\u2013Iran Conflict<\/title>\n<meta name=\"description\" content=\"Explore how escalating U.S.\u2013Iran tensions are driving volatility in global energy markets and reshaping risk dynamics.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/curve-series.com\/?p=1493\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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