Rising Conflict in Middle East Sends Oil Prices Soaring, Impacts Global Consumers
Oil prices have climbed sharply to a nearly six-week high. This follows increased military strikes between the United States and Iran in the Strait of Hormuz. This vital waterway carries about one-fifth of the world’s oil supply during peaceful times.
Brent crude, a global oil price, reached almost $97 for each barrel on Monday. This is a nine percent increase in five days. It is 19 percent higher than last month. US West Texas Intermediate crude also went up to $92.27 a barrel.
The conflict grew stronger in recent days. The United States hit three Iranian oil tankers on Saturday. Iran’s Islamic Revolutionary Guard Corps said it struck three tankers and three US-linked ships. These attacks happened in other areas.
Rachel Ziemba is an expert at the Center for a New American Security. She said this shows ongoing conflict and fighting. She added that oil supply problems worldwide continue. There seems to be no quick end to these shortages.
Saudi Aramco’s oil facilities in Jizan were attacked for a second time this month. The Financial Times reported this news. This attack might delay the plant’s return to making oil products. This situation makes oil prices even higher.
Fewer ships are now passing through the Strait of Hormuz. Only about 10 cargo ships cross it each day. This information comes from Kpler, a data company. Arif Gasilov, an energy advisor, said oil prices go up and down. He believes a ceasefire might not change prices much.
Drivers in the United States are paying more for fuel. High oil prices are making petrol more expensive. The average price for one gallon of petrol rose by 7 cents in a week. It reached $4.15 across the country on Monday. This is a 39 percent increase since the war began in February.
Diesel prices also reached record high levels. They topped $5.90 per gallon on Monday. Patrick De Haan from GasBuddy said very high diesel prices will soon make many goods more expensive. Markets expect these oil supply problems to last longer.
American families have spent an average of over $764 on fuel. This is since the conflict began. This amount is $418 more than what they usually spend. Brown University’s Watson School shared this information.
The economy is becoming a main concern for voters in the US. This is important before the midterm elections. Opinion polls show that many voters are unhappy with how President Donald Trump is managing the economy. Only 17 percent of Americans approve of his economic work.
China relies on oil imports that pass through the Strait of Hormuz. However, China has handled this situation well. It uses its own oil resources. China also uses oil from its Strategic Petroleum Reserve.
Professor John Gong, an economics expert, said China was ready for these challenges. He explained that China conserves its oil and gas. Russia also supplies almost half of China’s daily oil needs.
China is quickly moving towards cleaner energy and electric cars. Professor Gong noted that over half of the new cars sold in China are electric vehicles. This reduces the country’s need for oil.
