Gulf Energy Crisis Shifts to Chronic Phase as Oil Prices Fall

Expert-consensus framing with hedging language ('the question is whether', 'needs to be qualified') that presents multiple scenarios without advocating for one outcome. Uses technical/financial metrics to establish credibility and objectivity.

US-Israel military coordination demonstrates Western alliance cohesion but escalates Iran tensions. Iran's strategic control of Hormuz reasserts regional leverage. Temporary ceasefire suggests negotiation possibility, but underlying US-Iran antagonism remains. European energy dependence on Gulf supplies increases vulnerability; Asian economies face growth headwinds.

Similar to 1973 Yom Kippur War oil embargo and 1980-88 Iran-Iraq War tanker wars—regional conflicts weaponizing energy supplies with global economic consequences. Current situation differs by involving direct US-Israel strikes rather than proxy conflict.

Consumers face temporary fuel price relief as crude falls below $90/barrel, but sustained energy costs remain elevated relative to pre-crisis levels. European households face continued high gas prices despite recent declines. Inflation pressures persist in energy-dependent sectors, affecting food, transportation, and heating costs.

Governments likely to maintain price controls and subsidies (as UK carbon tax elimination suggests). Central banks may moderate rate-hike expectations given reduced inflation pressure, but geopolitical risk premiums warrant continued policy vigilance. Supply-side interventions (strategic reserves, alternative sourcing) expected to remain in place.