"Almost exactly four years ago, Russia started its invasion of Ukraine. Fairly quickly, the US sanctioned Russia's oil exports. Russia produced 12% of the world's oil then. By March, Brent crude futures hit $138. The increase in gas prices was not far behind. It reached $5.02 in June 2022. The run-up was fast. The price of a gallon of regular nationwide has been $2 in November."
"So what happens in the event of a full-scale war, particularly if it goes on for months? Iran can shut down the Strait of Hormuz, or at least make it dangerous for crude shipments. It has been estimated that up to 20% of the world's rice supply passes through it. According to the EIA, "The Strait of Hormuz is the world's most important oil chokepoint because of the large volumes of oil that flow through the strait.""
Russia's invasion of Ukraine and U.S. sanctions on Russian oil reduced supply and pushed Brent crude to $138, driving U.S. gasoline to $5.02 per gallon in June 2022 from about $2 the previous November. Rising U.S.–Iran tensions have lifted Brent from $59 in December to $71 and oil recently hit a six‑month high. A full-scale conflict could let Iran close or make the Strait of Hormuz dangerous, disrupting large volumes of crude. China’s need to replace Iranian shipments would increase global demand. A 40% crude price jump would be enough to reach $100 per barrel and significantly raise gasoline prices. The duration of any disruption is uncertain.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]