"All of which depends on what happens next in the U.S.-Iran war and with the blocked Strait of Hormuz. Not helping, Middle East countries are cutting oil production. Kuwait announced precautionary cuts to oil production because of 'Iranian threats against safe passage of ships through the Strait of Hormuz,' as quoted by CNBC."
"Iraq's production has fallen apart. Production from its three main oilfields fell 70% to 1.3 million. Before the war with Iran, those fields were pumping out 4.3 million bpd. That's all happening because they're running out of storage space because of the Strait of Hormuz."
"The average price of U.S. gasoline reached $3.48 a gallon, according to data from the AAA motor club. That is a nearly 17 percent increase since the first U.S.-Israeli attacks on Iran on Feb. 28. Gas hasn't been at these levels since 2024."
Stock markets are trading lower with the S&P 500 down 1.05%, the Dow down 1.11%, and the NASDAQ down 1.16%, driven by oil prices briefly touching $120. Middle Eastern production cuts, particularly from Kuwait and Iraq citing Iranian threats and storage constraints at the Strait of Hormuz, are exacerbating supply concerns. Iraq's oil production has collapsed 70% to 1.3 million barrels per day from 4.3 million before the conflict. U.S. gasoline prices have risen 17% since late February to $3.48 per gallon. Iran suggests oil could reach $200. Energy sector investments, including ETFs like XLE with a 0.09% expense ratio, are gaining as oil prices climb.
Read at 24/7 Wall St.
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