The conflict between Israel and Iran threatens to escalate. Oil prices rose significantly after Israel's attack. The big question in the next few days will be: What is happening in the Strait of Hormuz?
Tel Aviv/Tehran - The global energy markets are looking towards the Middle East with great concern these days. Now that Israel has retaliated against Iran, it remains unclear what Iran will do next. The Strait of Hormuz, through which 21 percent of the world's crude oil has to pass, is extremely important for the global economy. If Iran decides to disrupt or even completely stop shipping traffic here, it could trigger a global crisis.
Oil trading costs will rise - all eyes on Iran's reaction
Experts around the world have been speculating about this scenario for days. In an article by US think tank
The Atlantic Council,
energy economist David L. Goldwyn writes that he expects “at least” a significant jump in oil and gas transportation costs as shipping companies have to compensate for the new risk on shipping routes.
However, the worst-case scenario would be if Iran closes the Strait of Hormuz. All merchant ships that want 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 most severely affected, as these countries get 80 percent of their oil from this very region.
It is difficult to estimate whether a closure of the Strait of Hormuz is likely. Iran itself also has to transport its own oil through this road and is dependent on the income from the oil trade. However, if the US and its allies decide to impose stricter sanctions on Iranian oil than before, Tehran would have nothing to lose. If new oil sanctions are not imposed, Iran will not cut off its most important source of income.
At the same time, the Western allies actually want to restrict this very source of income that Tehran uses to finance terrorist groups such as Hamas and Hezbollah. A balancing act, then.
Iran can put pressure on neighboring countries to drive up oil prices
Nevertheless, Iran can use this leverage to cause oil prices to skyrocket. 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.
Oil market expert Kamel al-Harami in Dubai pointed
out another possible strategy for 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” Depends on the Flow of Oil through the Persian Gulf
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.
Analyst Ellen Wald, author of a book on the history of Saudi Arabian oil giant Aramco, said concerns about escalating conflicts 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