The escalating war between Israel, the US and Iran is driving up oil and gas prices and causing widespread disruption to global energy markets. According to CNBC, the scale of the spike will depend on how long the conflict lasts and whether supply routes remain blocked. Tanker traffic through the Strait of Hormuz, a key passageway for roughly one-third of the world’s seaborne oil, according to Kpler, has largely stopped. After hitting a session high of 12%, crude settled up 6% on Monday. European natural gas futures followed suit with a massive surge of more than 40%. “Our base case assumed that an unprecedented disruption would remain improbable. That assumption failed,” said Natasha Kaneva, Head of Global Commodities Research at JPMorgan. According to Kaneva, Brent crude could reach $120 per barrel should the conflict last more than three weeks. Bank of America commodity strategist Francisco Blanch says prices could climb above $100 if Iran targets regional energy facilities. Deutsche Bank analyst Michael Hsueh has warned that Brent crude could approach $200 if the Strait closes entirely. US drivers may soon feel the impact, as GasBuddy’s Patrick De Haan expects gasoline to rise 10 to 30 cents per gallon in the coming week.
The U.S. and Israeli attacks on Iran add yet more question marks around a U.S. economy already buffeted by on-and-off tariffs, weak hiring, and lingering inflationary pressures.
