The US Government has issued a stark warning that Middle Eastern oil production could collapse by up to nine million barrels per day in April, a potential 10% correction to global supply, as the conflict in Iran intensifies. According to official data released Tuesday, key producers are expected to shut in massive volumes, sending immediate shockwaves through energy markets and raising urgent questions about inflation and global economic stability.

The forecast is the latest sign that the war in Iran has become one of the worst disruptions to global energy markets in history as shipments through the critical Strait of Hormuz are severely curtailed. It has also rocked the US energy market and stocks, causing leading tech and AI stocks to sink as well as the S&P 500 and Dow Jones indexes. According to the US Energy Information Administration’s Short-Term Energy Outlook, Iraq, Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, and Bahrain have collectively reduced 7.5 million barrels per day of crude production in March. That number is set to reach 9.1 million barrels a day in April, the agency estimated.

US President Donald Trump has issued an 8 pm ET deadline on Tuesday for Iran to reopen the Strait of Hormuz before the US begins attacks on critical infrastructure. Should the attacks be executed, the disruption to the global energy market will be even worse, heavily harming the oil market. Crude oil prices already climbed above $115, while Brent crude prices are above $110. Market commentators were already predicting a $150 to $200 price per barrel if the war escalates.

Furthermore, after Trump’s dire warning for Tuesday, Iran has kept all diplomatic channels frozen. They called his statements “arrogant rhetoric and baseless threats” that would not hinder their operations. Despite multiple threats, Iran has yet to open the Strait of Hormuz. Oil prices have been surging since March due to the tensions stemming from the conflict. Even gold has risen 7.5% year-to-date and could rise further in the charts.