Gulf Crisis Exposes Fragility of Energy Security, Hilal Oil CEO Warns at Washington Conference
Hilal Oil CEO Majid Hamid Jafar warns the recent Gulf crisis has revealed deep energy security vulnerabilities, calling for immediate investment in resilient infrastructure and alternative supply routes.
The recent Gulf crisis has evolved into a global shock that, according to Majid Hamid Jafar, CEO of Sharjah-based Hilal Oil, has exposed critical weaknesses in international energy security. Speaking at the “Diplomacy of Oil 2026” conference in Washington organized by the Institute of the Arab Gulf States, Jafar said disruptions through the Strait of Hormuz have reverberated far beyond fuel markets. His remarks, delivered to an audience of business leaders, financiers and government officials, framed the episode as a test of infrastructure resilience and international cooperation.
Gulf transit disruption and global reach
Jafar emphasized that the Strait of Hormuz — a narrow chokepoint through which roughly one-fifth of global oil typically flows — was at the center of the crisis.
He noted the waterway also carries nearly one-third of traded fertilizers and about 40 percent of the world’s helium, underscoring how concentrated transit routes underpin modern industry.
The executive warned that the disruption’s impact is not limited to pump prices; it extends to food supply chains, semiconductor manufacturing and aviation, illustrating energy security’s direct link to daily life and high-tech industries.
By connecting energy flows to a broad range of critical goods, Jafar framed the incident as a systemic vulnerability that policymakers and investors must address.
Economic losses and supply shortfalls outlined
Jafar presented estimates that direct damage to energy infrastructure has already surpassed $60 billion, while interrupted trade and revenue losses have exceeded $150 billion.
He added that more than a billion barrels of oil supply have been lost since the start of the disruptions, a shortfall that international agencies and market analysts have described as among the largest in oil-market history.
Those figures, he said, have helped prompt economists to downgrade growth forecasts for the year and raise inflation projections, compounding the crisis’s broader macroeconomic effects.
Jafar used the numbers to argue that short-term market fixes will not suffice without parallel investments to strengthen systemic resilience.
Infrastructure, workforce and international law concerns
Jafar urged policymakers to view energy infrastructure as more than steel and concrete, describing it as a complex system of human expertise and livelihoods.
He praised engineers, field operators and maintenance crews in the region for maintaining flows under unprecedented risk, often at considerable personal sacrifice.
He also made a legal and ethical argument, stating that the intentional targeting of civilian energy infrastructure should be treated as a war crime under international law.
Jafar warned that such attacks have consequences for lives and livelihoods not only in producing countries but across global economies dependent on uninterrupted energy supplies.
Resilience as an investable asset
Arguing that resilience has emerged as a distinct investment category, Jafar said sovereign wealth funds, development finance institutions and long-term institutional investors now face “wide-open” opportunities.
He pointed to regional moves to develop overland export corridors bypassing the Strait of Hormuz, expanded distributed strategic storage, alternative export pipelines and cross-border interconnections as early examples.
Jafar suggested that these projects serve dual purposes: reducing chokepoint dependence and converting energy resources into sustained local value.
He framed resilience spending as a strategic reallocation that can protect revenues and shield consumers from future shocks.
Company operations and regional strategy
Highlighting Hilal Oil’s own work in Iraq, Jafar said the company continued operations and expanded amid security challenges, recording a 50 percent rise in gas production last year.
He credited partnerships with international financiers, including ongoing support from the U.S. International Development Finance Corporation, for enabling that growth despite a volatile environment.
Jafar argued the region’s long-term prosperity depends less on maximizing output and more on securing production through diversified routes, stronger storage and value-adding domestic industries.
He urged a continued shift toward embedding resilience into national and corporate strategies across the Gulf.
The gulf crisis, Jafar concluded, is a practical lesson that the next era of energy competitiveness will reward those who can guarantee supply and convert resources into durable local benefits.
Countries and companies that invest in redundancy, distributed storage and alternative corridors, he said, will be better positioned to protect citizens and maintain economic stability in an increasingly volatile global landscape.