Expert Warns US Military Action Against Iran Risks Global Energy Crisis

Former Ambassador KP Fabian warns that potential US military action against Iran threatens regional stability, risks destroying Gulf oil infrastructure, and could cause a dramatic surge in global crude oil prices and import costs.

US Military Intervention Risks and Global Energy Impact

Former Indian Ambassador to Qatar KP Fabian warned that any renewed US military action against Iran could escalate tensions in the Middle East, drive up global energy prices and destroy oil facilities in Gulf countries. Speaking to ANI, Fabian referred to US President Donald Trump's remarks suggesting the possibility of another military operation against Iran and warned that further escalation could threaten regional stability and worsen the ongoing energy crisis. “It could cause escalation and also push up the price of energy,” he said. “We have to look at the big picture. President Trump is slightly disconnected from the real world. A part of President Trump wants to have a diplomatic resolution of the matter,” Fabian said, adding that “the other part of President Trump seems to believe that military intervention is still a possibility... and the third part of President Trump is that, by threatening military action, he hopes to derive a better deal during diplomatic negotiations.”

Potential Consequences for Oil Markets

According to Fabian, the resumption of military operations might not achieve the desired outcome and would create too many complications. He warned that “The oil facilities in the GCC countries might be destroyed.” The remarks come as escalating tensions in the Middle East have pushed oil prices to a five-month high, with Brent crude reaching USD 117 per barrel. At the time of reporting, Brent crude was trading at around USD 116.91 per barrel, while WTI was trading at approximately USD 103.44 per barrel. The surge in oil prices comes amid rising tensions in the Middle East, attacks by Iran-aligned Houthi militants on Saudi Arabia and concerns over possible disruptions to key oil supply routes. Uncertainty surrounding the US-Iran conflict has further fuelled fears of a potential increase in oil prices.

Understanding FOB vs CIF Pricing

Fabian explained that the actual cost of imported crude oil is based on the Cost, Insurance and Freight (CIF) price, rather than the Free on Board (FOB) price. He noted that crude oil priced at USD 117 per barrel on an FOB basis could cost around USD 157 per barrel on a CIF basis after including transportation and insurance charges. Fabian noted that the quoted market price is based on Free on Board (FOB) terms rather than Cost, Insurance and Freight (CIF), which reflects the actual import cost. “The actual price you pay is CIF, not Free on Board. Now, the CIF for USD 117 per barrel will easily be USD 157 per barrel,” he said.

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