By Nana Karikari, Senior Global Affairs Correspondent
Oil and gas prices have exploded to a two-year high as fallout from the Middle East conflict intensifies. Brent crude topped $93 (GH₵ 1,000.92) on Friday—reaching as high as $94 in weekend trading—marking a 27% increase in just seven days. Meanwhile, American crude settled at $90.90 (GH₵ 1,481.67), up 36% from a week ago.
This surge follows a stark warning from Qatar’s Energy Minister, Saad al-Kaabi, who cautioned that the escalating war involving the U.S., Israel, and Iran could “bring down the economies of the world” if critical shipping routes remain blocked. He noted that all Gulf energy production could potentially cease within days if hostilities do not subside.
The crisis has now expanded beyond crude oil; European gas futures (TTF) have spiked over 50% in a single week, surging past (GH₵ 813.22) This follows the official shutdown of Qatar’s Ras Laffan LNG plant—the world’s largest export facility—which was declared force majeure after sustaining direct hits during recent military strikes.
Strategic shipping lanes paralyzed by conflict
The Strait of Hormuz, a narrow passage through which a fifth of the world’s oil supply flows, has reached a near-total standstill. The ongoing war involving the U.S., Israel, and Iran has left tankers carrying roughly 20 million barrels of oil stranded in the Persian Gulf.
The crisis has shifted from a logistical delay to a production halt as regional storage facilities hit capacity. If the disruption continues, the impact on global trade will be catastrophic. Analysts warn that major storage hubs in Saudi Arabia and the U.A.E. are filling “fast,” with expectations that they will hit their physical limits in under three weeks. “We are on the edge of trying to understand if this is a very short energy crisis or the beginning of a massive economic and energy crisis,” said Jorge Leon, an analyst at
Rystad Energy. “If this lasts for more than two weeks, the likelihood of seeing very significant implications for the energy system are much higher.”
The “Tank Top” Crisis and Production Cuts
Kuwait has joined Iraq in slashing oil production, not by choice, but because it is running out of places to store extracted crude. This condition, known as “tank tops,” has forced Kuwaiti officials to discuss limiting production to only what is needed for domestic consumption. Iraq has already seen a massive contraction, with output at the Rumaila field dropping by 700,000 barrels a day and the West Qurna 2 field falling by 450,000 barrels.
“Storage is limited in the Middle East, and the only fix to avoid tanks running over is to curb production,” said Giovanni Staunovo, commodity strategist at UBS. This “forced” shut-in of wells is particularly dangerous, as it risks long-term damage to reservoir pressure and incurs massive restart costs.
Qatar triggers force majeure after military strikes
QatarEnergy has officially halted the production of liquefied natural gas (LNG) following military attacks on its facilities. The company declared “force majeure,” a legal clause that waives liability for missed deliveries due to events outside its control.
Mr. Kaabi, who also serves as the chief executive of QatarEnergy, stated that resuming normal operations would take “weeks to months” even if hostilities ended immediately. “Everybody’s energy price is going to go higher,” Kaabi told the Financial Times. “There will be shortages of some products, and there will be a chain reaction of factories that can’t supply.” Experts agree that even if the Strait of Hormuz reopened tomorrow, the “operational hangover” from shutting down complex pump networks and manifolds means supply will remain suppressed for a prolonged period.
Inflationary pressure threatens Ghana’s ‘single-digit’ recovery
The spike in energy costs is expected to fuel inflation across the globe, with acute concern for African markets. In Ghana, which recently achieved a milestone single-digit inflation rate of 3.8%, there are fears this “hard-won progress” may be reversed. The global shock is already visible elsewhere; diesel prices have doubled in Europe, while jet fuel prices in Asia have risen by nearly 200%.
The global shock is already visible elsewhere; diesel prices have doubled in Europe, while U.S. retail gasoline has jumped to $3.32 per gallon, up from under $3 just a week ago. As a country with a deregulated pricing system, global price hikes are reflected
almost instantly at local pumps. If oil hits the predicted $150 (GH₵ 2,445.00) a barrel, the resulting “chain reaction” would likely drive up transport fares and food costs. “I feel sorry for my fellow citizens who are living paycheck to paycheck because they have to drive to work,” said Jerry Dalpiaz, a consumer monitoring the crisis. “They need some relief and it doesn’t seem to be coming anytime soon.”
Global leaders scramble to stabilize markets
The energy shock is fundamentally shifting the landscape for central banks. A resurgent wave of energy-driven inflation may force the Federal Reserve and other policymakers to halt expected interest rate cuts or pivot back to tightening. While U.S. Energy Secretary Chris Wright has attempted to calm markets by predicting a short conflict, investors are increasingly pricing in a long-term disruption.
U.S. President Donald Trump has issued a plan to insure losses up to approximately $20 billion (GH₵ 326 billion) in the Gulf region to restore maritime trade. However, the effectiveness of this plan is hampered by the fact that Saudi Arabia’s primary loading facility, Ras Tanura, has already been targeted by drone strikes, forcing a reliance on the Red Sea port of Yanbu, which can only partially offset the loss of Gulf routes.
Energy experts remain skeptical that insurance alone can solve the security risks posed by drones and mines in the Strait. “The problem is that in the oil trading and shipping world, people are worried about counter-terrorism,” said Amy Jaffe, director of the Energy, Climate Justice and Sustainability Lab at NYU. Market experts like Al Salazar of Enverus added that “the more news we get, the more it seems like this is going to last a really long time.”
Precarious outlook for the coming weeks
The duration of the production halt will determine the severity of the global economic fallout. With Kuwait’s storage expected to be completely full within 12 days, the window to prevent a total regional shutdown is closing. While the UAE and Saudi Arabia possess pipelines that bypass the Strait of Hormuz, these alternatives cannot fully compensate for a total regional shutdown.
“If this war continues for a few weeks, GDP growth around the world will be impacted,” experts warn. With Ghanaian fuel importers already projecting higher landing costs, the African Union has warned that the escalation threatens both regional energy security and food price stability.
