Oil on fire! The barrel is $100

The Strait of Hormuz is closed or controlled, allowing only ships flying the flags of countries friendly to Iran to pass through. This has made the Gulf unsafe for navigation, causing panic and a shortage of oil globally, with no certainty about how long the crisis will last. International energy agencies have been forced to release more than 400 million barrels from strategic reserves to ease the situation, but with no information on how long this will last. Oil prices have surged to three-digit levels as the unexpected happens.

The Strait of Hormuz is effectively controlled by Iran, and permits are required to pass through. How long will oil remain at these high levels? The answer depends on the continuation of the ongoing war with Iran. Disrupting oil supply from the Arabian Gulf, which is home to 20 percent of the world’s oil, along with closing the Strait of Hormuz, is like declaring global war. The world depends heavily on Arabian Gulf oil.

Is there no way to keep this region out of war to ensure the safe supply of crude oil, refined products, and gas without disruption? The world will increasingly rely on Arabian Gulf oil in the long term. Today, crude oil is above $102 per barrel and is likely to rise further with any escalation of war or threats that could lead to disaster, if not a full-scale war. At a minimum, closure of the Arabian Gulf would cause global oil disruptions and shortages. We hope it does not come to that. Our Gulf is in crisis, and so is the oil supply.