Why the oil and gas price shock from the Iran war won't just fade away

"The US-Israeli war on Iran will have a profound impact on the global energy markets, sending the price of Brent crude oil soaring to nearly $120 per barrel."

"The closure of the Strait of Hormuz has resulted in a physical chokepoint, taking offline part of the supply of oil and gas due to disruptions in tanker traffic."

"The 2022 energy shock was primarily driven by sanctions and price caps imposed on Russia, which rerouted oil and gas flows without changing Russia's market position."

"Unlike the previous energy crisis, the current situation is unlikely to see a quick market normalization due to the significant economic costs involved."

The US-Israeli war on Iran has led to a substantial reduction in oil and gas supply, causing Brent crude oil prices to approach $120 per barrel. This situation mirrors the energy shock experienced during the Russia-Ukraine war, but the current crisis is expected to have a more lasting economic impact. The closure of the Strait of Hormuz has disrupted tanker traffic, forcing Gulf producers to limit output due to storage constraints. Unlike the previous crisis, the current war creates a physical chokepoint that complicates market stabilization.

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