"The war against Iran, which started in earnest over the past weekend, has disrupted oil and gas shipments in the Middle East, constricting supply, and with no clear timetable as to when the war could end (or if there's a plan for a drawdown), markets are spooked about the potential for a prolonged conflict and market hiccups."
"Specifically, concerns about shipments getting through the Strait of Hormuz-a busy shipping lane for fossil fuel-carrying tankers-have been effectively stopped, and no one knows with any certainty as to when it could reopen. Additionally, insurers have cancelled war risk coverage policies for ships and vessels traveling through the region, increasing costs."
"Oil prices, as a result, shot up in recent days. Brent crude, which is the global benchmark in the oil market, was trading at more than $82 per barrel as of midday Tuesday. That's up almost 13% over the past week, and the highest price since July 2024."
Oil prices surged to 18-month highs following escalating conflict between the United States, Israel, and Iran. The conflict has severely disrupted oil and gas shipments through the Middle East, particularly blocking the Strait of Hormuz, a critical shipping lane for fossil fuel tankers. Insurers cancelled war risk coverage for vessels in the region, increasing shipping costs and rates. Iran, a major oil exporter producing 1.9 million barrels daily, faces potential production stifling. Brent crude traded above $82 per barrel, up 13% weekly, while WTI crude reached $76 per barrel. Approximately 150 ships were stranded near the Strait of Hormuz. Rising oil prices directly impact consumers, with U.S. gas prices averaging over $3 per gallon, with heating oil and propane expected to increase similarly.
Read at Fast Company
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