FACTBOX: Oil markets brace for potential US strikes on Iran's energy infrastructure

Oil markets are bracing for potential US attacks on Iran as nuclear talks drag on, with prices opening higher Feb. 24, on perceived risks to energy shipping and infrastructure in the Middle East.

Longstanding expectations by many analysts of a supply glut in 2026 are tempering price gains. S&P Global Energy CERA analysts said there is enough spare production capacity in the Gulf region to offset a complete loss of 1.6 million b/d of Iranian crude exports.

Still, any future spread of the conflict to involve other producers in the oil-rich region or a closure of the Strait of Hormuz could cause major disruptions to global trade.

"The likelihood of US attacks on Iran has increased. For oil, the key question is if attacks and their repercussions interrupt the flow of oil from Iran or other regional producers," Jim Burkhard, CERA's vice president of oil markets, energy and mobility, wrote in a Feb. 19 note.

The following are key facts about the potential impact on oil markets:

Prices

• Crude prices are still at six-month highs, with Brent rallying by about $11/barrel year to date, reflecting higher geopolitical uncertainty.
• Platts, part of S&P Global Energy, assessed Dated Brent at $72.77/b on Feb. 23, up roughly $4/b from the beginning of the month.
• A potential 1 million b/d supply disruption — which corresponds to half of Iran's crude exports — for 12 months would boost the fair value of oil by $8, according to Goldman analysts.
• The spread between same-month cash Brent and cash Dubai remains in positive territory, showing weaker demand for sour crude relative to weak crude. Platts assessed the spread at $1.13/b on Feb. 24.
• The UAE set the May Dubai crude OSP at a 5 cents/b premium to the average May Oman futures settlement, up from a 30 cents/b discount for April.
• The April Brent-Dubai exchange of futures for swaps was pegged at $2.01/b Feb. 24, up 17 cents/b over the same period.
• If Iran sanctions were removed, Goldman estimates that Brent would average $56-$60/b in Q4 2026/2027, with a "gradual" 500,000-b/d rise in Iran crude production and a gradual 100-million-barrel decline in Iran crude at sea from about 160 million barrels currently.

Trade Flows

• The Strait of Hormuz remains a critical chokepoint handling 20% of global oil supply. The US Maritime Administration issued an advisory Feb. 9, warning US-flagged commercial ships transiting the Strait and Gulf of Oman to remain as far as possible from Iran's territorial sea, "without compromising navigational safety."
• Iran's recent live-fire drills briefly closed the strait, though market impact was limited. Military escalation or prolonged closures in the Strait of Hormuz could disrupt energy flows across the Middle East.
• Iran produced 3.19 million b/d of crude in January, according to the latest OPEC+ survey from Platts. That month, Iran exported 1.3 million b/d, predominantly to China, according to S&P Global Commodities at Sea data.
• Chinese independent refineries cut their Iranian crude imports to 1.17 million b/d in January, down 14.4% from December.
• But over 2025, China's independent refineries raised their Iranian crude imports by 10.3% year over year to 1.5 million b/d, accounting for 35.6% of their feedstock share.
• Iranian crude volumes held in temporary floating storage in Southeast Asia had spiked above 89 million barrels in end-2025, a record level, according to CAS data. They have since dropped to 18 million barrels as of Feb. 23, within the long-term average.
• Similar grades to Iranian crudes include Saudi Arabia's Arab Heavy, Arab Light and Arab Medium; Iraq's Basrah Light, Basrah Medium and Basrah Heavy; Russia's Urals; the UAE's Upper Zakum; Oman Crude Blend; Kuwait Export Crude; Venezuela's Mesa 30 and Merey 16; and Mexico's Maya.

Infrastructure

• Iran's oil export terminals at Kharg Island handle most of the country's crude exports, and damage to infrastructure there could significantly impact Iran's ability to generate revenue.
• Iran's Jask oil terminal bypasses the Strait of Hormuz and is connected to a 1,000-km, 42-inch pipeline able to transport heavy and medium crude oil from Goureh in the Bushehr province.
• Israeli strikes in June 2025 damaged infrastructure at Iran's biggest gas field, South Pars. The field produced 725 million cubic meters/day late last year, which provided 75% of the country's total national supply.
• Iran has reportedly sought sanctions relief as part of the talks, and Iran's oil minister has said that working with the US on oil and gas could be possible.