A geopolitical powder keg: Iran could drive up the price of oil and cause the global economy to falter.
Tel Aviv/Tehran - The global energy markets are currently turning their concerned eyes to the Middle East. Now that Israel has carried out its retaliatory strike against Iran, the question remains as to how Iran will respond. The Strait of Hormuz, through which 21 percent of the world's crude oil is transported, plays a crucial role in the global economy. If Iran decides to disrupt or even completely eliminate shipping traffic in this region, it could trigger a global crisis.
Oil shock: Iran has great power over the Strait of Hormuz
Experts around the world have been speculating about this scenario for days. David L. Goldwyn, an energy economist, writes in an article for the US think tank
The Atlantic Council
that he expects "at least" a significant increase in oil and gas transportation costs as shipping companies have to offset the increased risk on shipping routes.
However, the worst scenario would be if Iran blocked the Strait of Hormuz. All merchant ships wishing to enter or leave the Persian Gulf must pass through this strait. This affects 21 percent of global oil and gas trade. Asia would be the most affected as these countries get 80 percent of their oil from this region.
It is difficult to assess whether a closure of the Strait of Hormuz is likely. Iran itself relies on income from oil trade and has to transport its own oil through this strait. However, if the US and its allies decide to impose stricter sanctions on Iranian oil than before, Tehran would have nothing to lose. Without new oil sanctions, Iran will not restrict its most important source of income.
But Western allies want to limit the very source of revenue that Tehran uses to finance terrorist groups like Hamas and Hezbollah. A balancing act, then.
Oil Price Jumps Over $90 After Israel Attacks Iran
Nevertheless, Iran can use this leverage to drive up the price of oil. It is enough to stop a few ships on their way through the Strait of Hormuz, as
Capital
explains. On Saturday (April 13), for example, according to Iranian state media, the Iranian Revolutionary Guard seized a container ship there “with connections” to Israel.
Kamel al-Harami, an oil market expert in Dubai, pointed
out another possible strategy by Iran to the
AFP
news agency. The mullahs' regime could also put pressure on countries like Iraq to reduce their own oil deliveries. This would also allow Tehran to drive up the price of oil and thus put pressure on the West.
In the event of a further escalation, the price of oil could reach three digits; the economist Folkver Hellmeyer at ntv even speaks of 150 dollars per barrel. For comparison: the price of oil currently fluctuates between 80 and 90 dollars per barrel. Immediately after Israel's attack on Iran, they shot Oil prices even briefly exceeded the $90 mark.
“Economic catastrophe”: Oil blockade by Iran still unlikely
The Islamist Houthi militia in Yemen has been attacking merchant ships in the Red Sea and the Gulf of Aden since November. The Houthis see themselves as part of the “Axis of Resistance” directed against Israel and supported by Iran, which includes the Palestinian Hamas and the Hezbollah militia in Lebanon.
Ellen Wald, an analyst and author of a book on the history of Saudi oil giant Aramco, said concerns about escalating conflict in the Middle East could drive oil prices higher in the short term. “But unless something happens that stops the flow of oil from the Persian Gulf for a longer period of time - and that is very unlikely - there will be no economic catastrophe,” she said, also optimistically.
With material from AFP