The ongoing military operations by the United States and Israel against Iran have raised fears of severe disruption to the global energy supply system.
Energy economist Ed Hirs has warned that the tension could send crude oil prices soaring in the world market, potentially reaching $150 per barrel, accordign to an Al Jazeera report.
In an interview with Al Jazeera on Wednesday, the University of Houston lecturer said that if even half of the oil supply flowing through the strategically important Strait of Hormuz is halted, the global economy could face an unprecedented crisis. The risk is increasing further as the U.S. Navy is reportedly unable to provide adequate security to the oil tankers traveling through that route.
Data from Brent crude global markets show that from late February to early March, the price per barrel has risen by more than $11. It has climbed from around $72–$48 to $83.51 per barrel today.
Highlighting the current volatility in the energy market, Ed Hirs said the liquefied natural gas (LNG) market has already started to feel negative effects. On the very first day of the military operation, LNG prices jumped by more than 40%, and between Monday and Tuesday this week, natural gas prices in European countries nearly doubled.
Hirs also noted that diesel prices are rising at an unusual rate. In the current situation, countries that rely heavily on gas are beginning to stockpile petroleum as an alternative, which is directly affecting future energy orders in some U.S. states.
The situation at the Rumaila oil field in Basra, Iraq further highlights the depth of the crisis. With the Strait of Hormuz effectively blocked, oil exports are being disrupted, forcing Iraq to reduce its daily oil production by nearly 1.5 million barrels.
Images published by international media showing gas flares burning at the Rumaila oil field reflect the helplessness of oil-producing countries in the Middle East. Analysts warn that if this supply shortage continues for a long time, the production systems of industrialized nations in Asia and Europe could face serious breakdowns.
Hirs also cautioned that this energy crisis could become a major challenge for U.S. President Donald Trump in the context of domestic politics. Particularly in the New England region of the United States, soaring fuel prices could severely strain daily life, potentially hurting the Trump administration’s popularity in the upcoming midterm elections.
If this economic instability persists, it could create political turmoil not only in the Middle East but also within the United States itself. Overall, analysts believe that unless the situation in the Strait of Hormuz is resolved, global energy prices may spiral out of control.