The oil prices are such that on Monday, the prices are likely to skyrocket due to an increasing tension between the US, Israel and Iran, coupled with the effective sealing of the Strait of Hormuz, shaking the world markets.
Global Oil Supply At Risk: How Iran’s Strikes And Strait Of Hormuz Closure Could Drive Prices Higher
Broker IG data indicates that the US crude is predicted to increase by approximately 9 percent during the process of trading, which will go up to more than 73 a barrel, the highest it has been since mid 2025. The increase is in spite of OPEC+ declaring to increase production even more than previously expected since the investors are afraid of disruptions of supply in the world on one of the most important energy corridors.
Iranian Revolutionary Guards also allegedly threatened ships that they could not pass via the Strait of Hormuz, which effectively closed the critical chokepoint through which almost 20 percent of oil in the world and some half a trillion worth of energy trade typically travels. Reuters reported that a tanker was attacked in the strait on Sunday, and over 150 vessels with crude oil, liquefied natural gas and refined products anchored offshore because of the security problems. The agriculture and world food prices would also be influenced by the disruption of shipment of chemicals and fertilisers. Analysts had cautioned that long term closure of the strait will have dire effects on energy markets. Barclays claimed that oil would be at risk of hitting $80 a barrel in case of a material supply disruption, and Royal Bank of Canada warned that the leaders in the region had encouraged Washington that it would be over $100. Even though eight of the OPEC+ members such as Saudi Arabia and Russia agreed to boost production by 206,000 barrels per day, analysts pointed out that there is still limited spare capacity and exports could have a hard time as long as the Gulf shipping lanes remain insecure.
Gold and silver Price?
The war has also roiled the financial markets and compelled the investors to safe haven assets. Gold and silver increased over 2 and 3 percent respectively on the weekend trade. The prices of shipping insurance in the area have also risen and ports like the Jebel Ali in Dubai have halted certain activities. The share markets in the Gulf plunged and Kuwait shut down its stock market completely highlighting the increasing economic consequences of the crisis.
