Oil is now under threat as the Gulf becomes a potential battleground, with oil tankers facing uncertainty over their routes, destinations, and ports for loading oil. Storage capacity is becoming limited, whether it takes one week or three weeks to find available ullage to store crude oil. This will inevitably lead to a reduction in crude production from oil fields, as well as in the output of products from Arabian Gulf refineries. A reduction in refining throughput is imminent, driven by the slow movement of oil tankers through the Gulf, the risks of war, and rising insurance costs.

The Gulf is no longer safe and is increasingly too risky for navigation. Sailing through it has become difficult, and the question remains - why take the risk? Fortunately, global markets are closed for the next two days. However, if the war on Iran continues, oil markets are likely to face even greater pressure. The longer the war continues, the firmer the oil prices will become, potentially reaching and surpassing $100 per barrel, especially if any Gulf crude-producing country halts production or if tanker traffic through the Arabian Gulf is disrupted. Any threats or signs of closing the Strait of Hormuz would almost certainly trigger panic in the oil markets, sending prices soaring well above $100 per barrel.

The current situation has also led to a relaxation on Russian oil, allowing India to resume imports of Russian crude following an agreement with the U.S. administration. India relies on oil from both the Gulf region and Russia, leaving it with limited alternatives, which pressured the U.S. to accommodate its request. This arrangement is likely to remain in place for some time. The world did not anticipate the outbreak of a joint war between the USA and Israel against a solitary Iran. Now that the war with Iran has begun, the Arabian Gulf countries has ended up in the middle. No one knows how it will end or at what cost. Oil prices are rising and may reach historic levels, fueling high inflation and driving up the cost of every single item in households worldwide.

Challenging days lie ahead. Ending the war quickly is the only solution, but that is a hopeful wish. With oil prices soaring beyond $100 per barrel, inflation will continue to climb. The war has begun. The world must act to stop it as soon as possible.