How long the US and Israeli war with Iran could last, where it could spread and what it would mean for oil and markets, from a call with Coleman Research in March 2026. Around a fifth of the world's oil passes through the Strait of Hormuz, and mining it could disrupt global trade for six to twelve months.
Jump to our call ↓
Military supply and regime outcomes will shape the conflict trajectory
Ammunition supply levels will directly impact the duration and intensity of the conflict.
The nature of the regime in power will be the primary driver of long-term stability.
Continued extremist leadership increases the likelihood of renewed conflict in the near to medium term.
De-escalation is possible if a new regime engages with the US on key conditions: nuclear disarmament, cessation of proxy funding, reduced internal repression, and secularisation.
The conflict has become regionally contained, but escalation risks remain
Most neighbouring and Gulf states are currently involved in a defensive capacity.
The entry of larger regional powers would mark a transition to full-scale regional war.
Broader escalation remains a key downside risk scenario.
The call
Continued extremist leadership increases the likelihood of renewed conflict in the near to medium term.
The risk to it
De-escalation is possible if a new regime engages with the US on key conditions: nuclear disarmament, cessation of proxy funding, reduced internal repression, and secularisation.
Control of the Strait of Hormuz is a core lever of economic coercion
~20% of global oil supply and ~5% of global trade transit the Strait.
Iranian threats have already created de facto disruption by increasing shipping risk and costs.
Mining or blocking the Strait could disrupt global trade for 6-12 months, though at significant cost to Iran and its partners.
~20%
of global oil supply transits the Strait of Hormuz
~5%
of global trade takes the same route
6-12months
of disrupted trade if the Strait is mined or blocked
Critical infrastructure targets increase strategic vulnerability
Iran has demonstrated willingness to target regional energy infrastructure.
Water desalination facilities represent an additional point of vulnerability in Gulf states.
Even low-level attacks risk undermining recent investment and economic stability in the region.
Kharg Island is a strategic chokepoint for Iran's oil exports
The island serves as Iran’s primary oil export hub.
Disruption would have immediate implications for global oil markets.
Global economic and alliance implications are material
The conflict is already contributing to inflationary pressure globally.
Strategic petroleum reserve releases are unlikely to materially offset supply shocks.
Central banks are likely to respond with tighter monetary policy in the near term.
Divergent responses among NATO members could strain alliance cohesion.
“Strategic petroleum reserve releases are unlikely to materially offset supply shocks.”
Geopolitical competition with China may intensify
Control over Iranian (and Venezuelan) oil flows has implications for US-China dynamics.
Restricting China’s access to Iranian oil could create leverage in broader negotiations.
Escalation could contribute to a renewed and more pronounced US-China trade conflict.
Video call on the geopolitics of oil with Coleman Research