Tensions in the Middle East are having a ripple effect on global markets. Analysts are warning that the price of oil could exceed $100 per barrel. Currently, it’s around $80 per barrel.
History shows that conflicts can have far-reaching consequences beyond the countries involved. The recent US attack on Iran is a prime example. Some analysts believe the price of oil could surge due to the ongoing tensions.
The Strait of Hormuz, located off the coast of Iran, plays a critical role in the global oil trade. It’s a narrow waterway connecting the Persian Gulf to the Gulf of Oman. Approximately 30% of the world’s seaborne oil trade and 20% of global liquefied natural gas trade pass through this strait.
Last year, the average daily transport of oil and petroleum products through the strait was over 20 million barrels, equivalent to around 40 tankers per day. The average volume of gas transported was 290 million cubic meters.
Oil Price Impact
The price of fuel is expected to rise this week. Indicative prices suggest an increase of 8 cents for diesel and 3 cents for gasoline.
The Financial Times reported that the conflict in the Middle East has driven gas oil and jet fuel prices to a 15-month high, according to data from Argus, a commodities platform. An Argus expert cited in the Expresso newspaper noted that any issues in the Strait of Hormuz would particularly affect Europe’s gas oil supply, as a significant portion of the region’s road diesel came from Gulf producers like Saudi Arabia, Kuwait, and the United Arab Emirates last year.
The ongoing tensions in the Middle East are likely to continue affecting the global oil market, leading to potential price increases. As the situation develops, it’s essential to monitor the impact on fuel prices and the global economy.