Brent crude oil jumped 10%, trading around $80 a barrel over the counter after U.S. and Israeli strikes against Iran escalated Middle East tensions.
What we’re watching: Analysts predict oil prices could surge to $100 a barrel, especially if the Strait of Hormuz, a key oil transit chokepoint, remains closed.
Driving the news: Over 20% of the world’s oil supply moves through the Strait of Hormuz, and many tankers, oil majors, and trading houses have paused shipments through the area after Iranian warnings.
- The OPEC+ group agreed to raise oil output by 206,000 barrels per day from April, a modest increase representing less than 0.2% of global demand.
- Despite some alternative pipelines, closure of the Strait could remove 8–10 million barrels per day of oil supply from the market, experts say.
- Analysts expect oil prices to quickly surpass $90 or even $100 a barrel if the crisis persists and the Strait remains shut.
- Asian countries, including India, are reevaluating oil stockpiles and considering alternative suppliers such as Russia in response to possible Middle East shortfalls.
