Tensions between Israel and Iran are boiling over. For eight straight days, Israeli forces have been bombing Iranian territory, and insiders now warn that Tehran’s government could collapse under the pressure. If that happens, the world might face a major oil crisis.

According to CNBC, this conflict isn’t just about nuclear threats anymore. It’s turning into a direct attempt to shake the foundations of one of the world’s top oil producers. Oil prices have already climbed by around 10%, though Brent and US crude remain under $80. But experts say if this conflict drags on, global markets might not stay stable for long.

Trump Backs Israel, Talks of Regime Collapse Surface

Former U.S. President Donald Trump has thrown his support behind Israel, publicly warning Iran’s Supreme Leader Ayatollah Khamenei and hinting at deeper involvement. Israeli leaders, too, are signaling big intentions. Defense Minister Israel Katz has ordered the military to intensify operations to weaken the regime’s grip on power.

Prime Minister Netanyahu, while denying a direct plan for regime change, admitted the Iranian leadership might not survive this conflict. Behind the scenes, there were even discussions of targeting Khamenei directly—until Trump stepped in to block the move.

Scott Modell, a former CIA official, explains that Israel wants to weaken Iran from the inside—by creating an opening for internal opposition to overthrow the regime.

What Happens If Iran Collapses? Look at Oil History

JPMorgan has studied past oil-producing regime collapses and found that oil prices tend to surge. In fact, prices spiked by an average of 76% during such periods. After the Iranian revolution in 1979, global oil prices nearly tripled, and in 2011, Libya’s crisis pushed prices from $93 to $130 within three months.

Iran’s fall would be far more severe, analysts warn. The country exports far more oil than Libya did. If serious chaos erupts, markets could see millions of barrels per day vanish—driving prices way up.

Danger in the Strait of Hormuz

The bigger risk? Iran might lash out by targeting oil tankers or even shutting down the Strait of Hormuz—a narrow passage that handles 20% of the world’s oil. RBC's Helima Croft says Iran is already jamming shipping signals and making the region dangerous for tankers.

While there’s no open warfare in Hormuz yet, analysts aren’t ruling it out. Rapidan Energy Group believes there’s a 70% chance the U.S. could join Israeli airstrikes. If a nuclear site like Fordow is hit, oil prices could rise by $4–$6 per barrel overnight.

And if Iran retaliates by hitting energy infrastructure or blocking tankers, we could be looking at a prolonged global energy shock.

Bob McNally, a former White House energy adviser, warned that reopening the Strait wouldn’t be as easy as markets assume. “It might take weeks—or even months,” he said.

Bottom Line:

The world is standing on the edge of an oil crisis. If Iran’s regime falls or the Strait of Hormuz is blocked, we could see energy prices soar, impacting economies everywhere.