Global markets react as Middle Est tensions threaten oil supply

The situation in the Middle East is becoming increasingly tense. At the beginning of the week, Israel launched an attack on Lebanon, which responded with a retaliatory strike, firing hundreds of rockets. The United States got involved in the dispute, declaring support for Tel Aviv.

The conflict in the Middle East poses a severe threat to the stability of oil prices. On Tuesday morning, crude oil prices were falling, reaching $66, one of the year's lowest levels. Following Lebanon's attack, prices spiked and by Wednesday exceeded $72 per barrel. Gold prices also went up.

The Strait of Hormuz, situated between the Persian Gulf and the Gulf of Oman, may once again become a central point of this situation. This strategic strait is the most important transit point for oil in the world, with around 20% of global oil supplies, translating to 2.4 million barrels per day, passing through it.

A potential blockade of the Strait of Hormuz would have catastrophic consequences for the global economy. It would cause significant delays in deliveries and increase transportation costs, inevitably leading to a sharp rise in oil prices on global markets. Fuel market experts predict that in the event of a blockade by Iran, the price of oil could reach as high as $150 per barrel. Conversely, in a de-escalation scenario, prices could drop below $80 per barrel.

The Strait of Hormuz sees cargoes from key oil producers in the region such as Saudi Arabia, Iraq, Iran, Kuwait, Qatar, Bahrain, and the United Arab Emirates (UAE). The main recipients of these supplies are China, India, Japan, the United States, and Western European countries. Although Saudi Arabia and the UAE have pipeline infrastructure that could partially compensate for a potential blockade, it would not fully replace maritime transport.

Iran, which controls part of the territorial waters through which the shipping route passes, holds a crucial role in the functioning of the strait. In the event of a conflict escalation and a potential Israeli attack on Iran, oil prices could reach an astronomical level of $250 per barrel. It is worth noting that Iran is one of the most essential oil producers and a main sponsor of organizations such as Hezbollah and Hamas, which strive to destroy Israel.

History shows that Iran has repeatedly threatened to blockade the Strait of Hormuz in response to various international actions, such as sanctions or the withdrawal from nuclear agreements. However, experts believe an actual blockade is unlikely, as it could meet with a firm response from other regional oil producers and international forces.

The significance of the Bab al-Mandab Strait, located between Yemen and Ethiopia, is also worth noting. This strait, being the third most important maritime route for transporting energy resources, connects the Indian Ocean with the Mediterranean Sea through the Red Sea and the Suez Canal. A potential escalation of the conflict between Israel and Iran could also threaten the security of this trade route.

Global markets are closely watching the current situation in the Middle East. A potential blockade of key maritime routes could have far-reaching consequences for oil prices and the entire global economy. It would lead to increased geopolitical tension and could pressure European politicians regarding sanctions imposed on Russia.

Many Western countries, including the United States, the United Kingdom, France, and India, maintain a military presence in the region in response to repeated threats from Iran. This aims to ensure freedom of navigation and deter Iran from escalating the conflict. The situation remains tense, and the world anxiously observes developments in the Middle East, aware of the potential consequences for the global economy and energy security.