By Obinna Uballa
The escalating conflict involving Iran, the United States and Israel could trigger major disruptions in global energy markets and place additional pressure on emerging economies, according to warnings from Saudi Aramco and Fitch Ratings.
The New Diplomat had reported that oil prices rallied sharply on Monday, jumping almost 30%, crossing the $100-a-barrel mark. During the session, Brent climbed to $119.50 and WTI touched $119.48, the highest levels seen since mid-2022, before coming down $6.51, or 6.6%, to $92.45 a barrel for Brent crude earlier on Tuesday. US West Texas Intermediate (WTI) crude also dropped $6.12, or 6.5%, to $88.65.
Speaking on Tuesday, the president and chief executive officer of Saudi Aramco, Amin H. Nasser, cautioned that the ongoing war in the Middle East could have “catastrophic consequences” for global oil markets if the situation continues to escalate.
Nasser stressed that reopening the Strait of Hormuz had become critical to stabilising global oil supplies. The strategic waterway normally handles about 20 per cent of the world’s oil shipments but has been affected by disruptions linked to the ongoing hostilities.
“The disruption has caused a severe chain reaction not only in shipping and insurance but also across aviation, agriculture, automotive and other industries,” Nasser said during a media briefing announcing Aramco’s 2025 financial results.
“There would be catastrophic consequences for the world’s oil markets the longer the disruption goes on, and the more drastic the consequences for the global economy,” he added.
The Middle East crisis has also seen attacks on critical energy infrastructure across the Gulf region as Iran launched retaliatory drone and missile strikes on US-allied countries following joint airstrikes by Washington and Tel Aviv on February 28.
Among the facilities affected was Aramco’s major oil export complex at Ras Tanura oil terminal, one of the largest refining and export hubs in the Middle East, where some operations were temporarily halted.
Elsewhere in the Gulf, Bahrain’s Al Ma’ameer oil facility was hit, causing a fire and prompting the country’s state-owned energy company, Bapco, to declare force majeure. Similar warnings have been issued by energy producers in Qatar and Kuwait, signalling potential disruptions to supply contracts.
The mounting instability comes as Aramco reported weaker financial performance for 2025. The company recorded net income of $93.38 billion, representing a 12.1 per cent decline from $106.24 billion in 2024.
Adjusted net income also fell by 5.1 per cent to $104.65 billion, reflecting higher global supply levels, economic headwinds and trade tensions, including tariffs imposed by the United States.
Despite the decline, Aramco announced plans for its first-ever share buyback programme worth up to $3 billion over an 18-month period.
Meanwhile, Fitch Ratings warned that the conflict could expose emerging market economies to heightened financial and economic risks, particularly those heavily dependent on imported energy.
In a report titled “Iran conflict raises new credit risks for emerging market sovereigns,” the agency said prolonged disruptions to Gulf energy supplies could weaken investor confidence and intensify economic pressures in vulnerable economies.
“More sustained disruption to energy flows than currently assumed in our baseline scenario could significantly damage global investor sentiment,” Fitch stated.
The agency said rising energy prices could push inflation higher across many countries and force central banks to reconsider their monetary policy stance.
Fitch also warned that geopolitical tensions could strengthen the US dollar, weaken global debt markets and increase borrowing costs for countries with fragile financial positions.
Emerging economies reliant on imported fossil fuels are particularly exposed. The report noted that net fossil fuel imports account for around three per cent or more of gross domestic product in major economies such as India.
Beyond energy prices, Fitch said the conflict could affect emerging markets through several channels, including remittances, exchange-rate volatility, fiscal subsidies and reduced access to international finance.
“The Iran conflict could raise additional challenges for some emerging market sovereigns through such channels as energy imports, remittances, fiscal subsidies, exchange rates and access to international finance,” the report said.
