The suspension of transit through the Strait of Hormuz, the world’s most critical oil export route, has triggered major concerns about energy market stability. Roughly one-fifth of global oil supply passes through this strategic corridor, mainly from Saudi Arabia, the UAE, Iraq, Kuwait and Iran, along with significant LNG volumes from Qatar, according to Reuters.
Following US and Israeli strikes on Iran and Tehran’s announcement of navigation closure, major oil companies and shipping operators halted crude and LNG transit. UK authorities issued safety warnings, while the US Navy advised vessels to avoid not only the Strait of Hormuz but also the Persian Gulf, Gulf of Oman and northern Arabian Sea.
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Oil prices could climb to $90–100 per barrel
Analysts estimate that a rise to $90–100 per barrel could translate into a roughly 15% increase in fuel prices at the pump. Data from Kpler show that at least 14 LNG tankers have slowed down, altered routes or stopped near the strait, increasing risks for Qatar’s exports and global market stability.
OPEC+ is expected to consider higher production levels at its March 1 meeting involving eight member states, including Saudi Arabia and Russia.
“If the barrel rises from 73 to 75, 80, 90 or 100 dollars, this is not a simple stock market fluctuation. It is an economic multiplier… The price does not rise because supply has disappeared, but because the risk of disruption becomes credible,” stated Dumitru Chisăliţă, president of the Intelligent Energy Association, for Agerpres.
He warned that energy is a base cost for any economy, and higher oil prices increase production, agriculture and transport costs, potentially fueling renewed inflationary pressure.
Photo: freepik.com
