Last Updated:April 20, 2026, 11:04 IST
While stock markets reacts positively to hopes of de-escalation, people closer to the energy industry appear far more cautious.
Fatih Birol, executive director of the International Energy Agency, said that no country would be immune from the crisis, regardless of wealth or domestic energy availability.
A sharp rebound in global equities and a decline in oil prices last week suggested investors were betting that tensions between the United States and Iran were easing, reducing fears of an energy-driven global recession. But analysts and industry experts have warned that the optimism may be premature, with supply disruptions, damaged infrastructure and uncertainty around the Strait of Hormuz continuing to pose serious risks.
According to a report by The Washington Post, while stock markets reacted positively to hopes of de-escalation, people closer to the energy industry appear far more cautious.
“The people closest to the industry are far more concerned about these disruptions and recognise the length of time it will take for things to return to normal — if they ever do,” Gerry Morton, oil and gas co-chair at law firm Baker Botts, told The Washington Post.
Experts say the market response may be overlooking the time it takes to restore tanker traffic, repair damaged facilities and rebuild disrupted supply chains.
Supply Chains Under Pressure
Ritesh Jain, founder of investment firm Pinetree Macro, told the newspaper that supply chains in Asia and Europe were already under stress, even as markets continued to rise.
He suggested many investors are choosing to focus on near-term gains while assuming policymakers will eventually resolve the crisis.
Energy Shock Could Hit Wider Economy
The report noted that the impact may spread beyond crude oil. Europe could face jet fuel shortages within weeks, fertiliser prices have surged, and higher input costs may eventually feed into food inflation. Manufacturing hubs such as Vietnam and Bangladesh are also under pressure from soaring energy costs.
According to Associated Press, Fatih Birol, executive director of the International Energy Agency, said that no country would be immune from the crisis, regardless of wealth or domestic energy availability.
Echoes of the Pandemic Era
Some analysts compared the current market behaviour to the early phase of the Covid-19 pandemic, when financial markets rebounded before the full economic impact of broken supply chains and inflation became visible.
Emma Ashford, senior fellow at the Stimson Center, told The Washington Post that investors may be underestimating how long the disruption could last.
Oil Traders Also Surprised
Neil Crosby, head of oil research at Sparta, said he was surprised that oil futures had fallen below $100 despite continued risks to around 20% of global oil and gas flows linked to the Strait of Hormuz.
He added that short-term market moves were increasingly being driven by headlines and algorithmic trading rather than physical market realities.
Infrastructure Damage May Take Months or Years
Industry participants also warned that restoring damaged Gulf energy infrastructure may take much longer than markets expect. Morton cited the aftermath of the 1990 Iraqi invasion of Kuwait, when oil field restoration took years even after fighting ended.
According to Washington Post, Amir Handjani of the Quincy Institute for Responsible Statecraft said markets may be assuming strategic reserves can bridge the gap, but further attacks on infrastructure could trigger a much deeper supply shock.
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First Published:
April 20, 2026, 11:04 IST
News business economy Deeper Energy Crisis Ahead Amid Iran War? Analysts Warn of Serious Disruptions As Global Markets RiseDisclaimer: Comments reflect users’ views, not News18’s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
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