Three things have happened in the past three months that are best understood together.

The International Atomic Energy Agency issued a historic resolution against Iran for violating its commitment to nuclear non-proliferation.

Additionally, OPEC+ agreed to increase production threefold despite weak global oil demand growth, reaching the equivalent of the entirety of Iran’s exports in immediately available excess capacity, looking to offset any disruption in global oil markets from any conflict with Iran. 

Furthermore, several Sunni neighbouring nations have reached historic agreements with the United States and allow Israeli and American aircraft to fly over their airspace and use their bases.

OPEC+’s decision to offset the risk of disruption in Iran’s exports has two clear objectives: strengthen Saudi Arabia’s position as the global central bank of oil and limit any damage to China’s oil supply. China buys 90% of Iran’s oil exports.

Most neighbouring Arab nations see that the Iranian regime’s nuclear expansion is the biggest threat to their countries, not just to Israel. They know that Iran’s ayatollah regime wants to expand its influence over Sunni nations and impose a Shiite caliphate, as well as annihilate Israel.  Iran is, in fact, the most significant threat to the world.

The International Atomic Energy Agency (IAEA) recently concluded—in a harsh June 2025 resolution—that Iran is violating its nuclear non-proliferation obligations. The total lack of cooperation and transparency prevents the IAEA from confirming that Iran’s program is exclusively peaceful. The Iranian government responded arrogantly, announcing it would soon open another uranium enrichment plant.

Iran has accumulated more than 408 kilograms of uranium enriched to a level very close to the 90% needed for nuclear weapons. For peaceful purposes, only 4% enrichment is required. Both the excessive amount accumulated—far beyond the needs of its power plants—and the speed of enrichment indicate military objectives. This concentration is equivalent to nine nuclear bombs, with a third of the enriched uranium produced in the last three months—a real and growing threat.

All Arab countries understand this threat. Saudi Arabia’s Crown Prince Mohammed Bin Salman called Iran’s Supreme Leader, Ayatollah Ali Khamenei, “the new Hitler of the Middle East” in The New York Times, warning as early as 2017 that the “new Hitler in Iran must not be allowed to repeat what happened in Europe, this time in the Middle East.”

The Iran regime has never been more isolated. According to Bloomberg, “Iran is the most isolated it has been since the early years of the Islamic Republic, its theocracy on its own as it confronts among the most severe threats to its rule in decades with attacks by Israel and now the United States.”

The last option for Iran to show its power is to block the Strait of Hormuz. About 20–25% of the world’s oil supply and roughly one-fifth of global liquefied natural gas (LNG) trade move through the Strait of Hormuz. However, blocking the strait is easier said than done.

Iran has never successfully blocked the Strait of Hormuz, despite numerous threats in the past decades. Even during periods of intense conflict, such as the Iran-Iraq War in the 1980s—often referred to as the “Tanker Wars”—Iran and Iraq attacked oil tankers and commercial vessels, which disrupted shipping, caused insurance premiums to spike, and delayed maritime traffic, but did not fully stop the flow of oil and gas through the strait, according to Reuters.

Markets will likely see volatility in oil prices and significant spikes in vessel freight costs, as VLCC charges have doubled in the past week, but the evidence suggests that oil, freight costs and insurance premiums have risen to levels that are very far away from a crisis period. Markets had erased all geopolitical risk premiums from oil prices and ignored international tensions for years. We are living the return of geopolitical risk, but it seems unlikely that we will reach global crisis levels.