Middle East Tensions Poise Global Oil Markets for Volatility

Oil markets are anticipated to experience significant volatility due to recent US and Israeli strikes impacting Middle Eastern oil supplies. Potential disruptions could spike global oil prices, particularly if traffic through the Strait of Hormuz is affected, impacting global supply chains and consumer costs.

Recent military actions by the US and Israel have set the stage for significant turbulence in the global oil markets. With the implications for Middle Eastern oil supplies still unclear, experts predict price fluctuations next week.

In a scenario where operations remain unaffected, prices might quickly stabilize after an initial spike. However, a disruption in oil infrastructure or tanker traffic, particularly through the critical Strait of Hormuz, could lead to prolonged price increases. This passage is responsible for 20 percent of the world's oil supply daily.

Should oil transport indeed face interruptions, Chinese refiners might seek alternative sources, possibly driving up costs. Analysts project that limited strikes could result in a price surge up to USD 10 based on fear alone, though a wider conflict with Iran could escalate oil prices beyond USD 90 per barrel, significantly impacting consumer fuel prices globally.