Dr. Gul.i.Ayesha Bhatti
There have been oil shocks before, but rarely one with three separate authors. The 1973 embargo had a single cause and a single message: Arab producers punishing the West over the Yom Kippur War. What is unfolding now, seven months into the Iran-US war, is structurally different and arguably more dangerous, because it is not one crisis but three converging on the same market at once — Russia strangled by sanctions, Iran fighting an active war, and Saudi Arabia, the supplier everyone assumed was untouchable, now watching its own export arteries come under fire. Washington’s answer, a sweeping bet on Venezuelan oil, is the clearest evidence yet that American planners themselves see this as a structural, not temporary, problem.
Begin with what each supplier represents, because the distinctions matter more than the headline that “oil markets are in crisis.” Russia has been locked out of Western markets since 2022 over Ukraine, forced into discounted sales to China and India, a slow bleed rather than a sudden stop. Iran is different in kind: it is an active combatant, and its decision in early March to effectively close the Strait of Hormuz, through which a fifth of the world’s oil normally passes, was not a policy choice by outside powers but a wartime act by Tehran itself. That single move is the hinge on which this entire story turns. Saudi Arabia is different again, and in some ways the most alarming case. It is not sanctioned. It is not a combatant by choice. Its oil is sitting in the ground exactly where it has always been, and its customers are exactly where they have always been. What has changed is the road in between. Houthi drone and missile strikes have hit the East-West Pipeline, the very infrastructure built in the 1980s specifically to survive a Hormuz closure, along with the Jizan refinery and, by Saudi accounts, a drone intercepted near Mecca itself. Riyadh is being throttled not by policy but by geography turned into a battlefield.
That is what makes the current moment structurally unlike anything since 1973. In past shocks, there was usually one working alternative — a spare pipeline, a spare producer, a spare route. Today, Saudi Arabia’s own contingency plan for a Hormuz closure, the East-West Pipeline to Yanbu, has itself been sabotaged, forcing the kingdom back toward the very strait it built that pipeline to avoid. Its third option, rerouting through Egypt’s Sumed pipeline and the Suez Canal, adds three to four weeks to every voyage. Aramco’s own leadership has effectively admitted the existing toolkit isn’t enough, confirming it is scouting for routes that don’t yet exist. When the fallback for your fallback also fails, you are no longer managing a disruption. You are watching redundancy itself collapse.
Washington’s response tells you how seriously US planners take this. Rather than betting on a quick resolution in the Gulf, the Trump administration spent 2026 quietly building an entirely separate supply chain nine thousand kilometers away. Maduro’s removal in January, the sanctions relief on PDVSA in March explicitly justified by the need to offset Hormuz losses, and the August announcement of what Trump called the biggest oil deal in history, granting American interests majority control over more than 65 billion barrels of Venezuelan reserves, only make sense as a hedge against exactly this scenario: a war with no clear end date, a Saudi supply chain under direct attack, and a Russian supply permanently discounted. Interior Secretary Doug Burgum said as much without much subtlety, calling Venezuela a country with reserves and “no threat of the chokehold like we have in the Strait of Hormuz.” That is a planner’s sentence, not a diplomat’s.
The uncomfortable implication, and the one worth putting to any guest on this topic, is that Washington’s incentive to rush a deal with Iran has quietly diminished even as the war grinds on. A negotiating partner that has spent eight months building a 65-billion-barrel insurance policy is not a partner under acute time pressure. It can afford patience that Tehran, and frankly the mediators trying to end this war, including Pakistan through the Islamabad Memorandum, cannot necessarily afford on its behalf. That asymmetry should temper any optimism about a fast resolution emerging from this week’s UN General Assembly, however warmly Trump and Pezeshkian’s overlapping presence in New York is being read.
For countries like Pakistan, bound to Saudi Arabia through the Mecca Joint Defence Agreement and invested diplomatically in Iran’s de-escalation, the lesson of this convergence is not abstract. It is that the war’s economic front now matters as much as its military one, and that front is being fought over pipelines, straits, and Venezuelan production curves as much as over any battlefield. Three of the world’s most important oil suppliers, three separate causes, one market absorbing all of it simultaneously; whoever controls the alternative routes, not just the oil itself, will shape how this war actually ends, and on whose terms.
