World Stock Watch

**Global Energy Crisis Looms as Tensions Escalate in the Middle East**

The world’s most critical oil transportation route, the Strait of Hormuz, has been thrust into the spotlight as tensions between Iran and Israel continue to escalate. This vital waterway, situated between Iran and Oman, is responsible for transporting 21 million barrels of oil per day, equivalent to 21% of global crude trade.

Any disruption to oil flows through the Strait of Hormuz could have catastrophic consequences for global energy markets, leading to skyrocketing oil prices, increased shipping costs, and significant supply delays. Energy analysts warn that a blockade or significant disruption to oil flows through the Strait could push oil prices above $100 per barrel, with some predicting prices could reach as high as $150 per barrel or more.

The situation is further complicated by Israel’s promise to retaliate against Iran following a recent ballistic missile attack, which has raised concerns about a potential attack on Tehran’s energy infrastructure. Iran, a major player in the global oil market, has vowed to respond forcefully to any further Israeli actions.

Energy experts argue that oil markets are underestimating the risks of a widening conflict in the Middle East, with some predicting that supply disruptions along the Strait of Hormuz could have a devastating impact on global energy markets. A closure of the Strait for a month or more could lead to oil prices spiking to as high as $350 per barrel, according to some analysts.

The consequences of a disruption to oil flows through the Strait of Hormuz would not be limited to the oil market, with potential disruptions to liquified natural gas (LNG) flows from Qatar also a major concern. This could lead to shocks in global gas markets, particularly during the northern hemisphere winter when gas demand is higher.

As tensions continue to escalate in the Middle East, the world holds its breath, waiting to see how this crisis will unfold. One thing is certain: the consequences of a disruption to oil flows through the Strait of Hormuz would be felt globally, with far-reaching implications for energy markets, economies, and societies around the world.