Several major oil companies have already suspended crude oil and fuel shipments through the Strait of Hormuz, and the price of Brent crude could rise from $73 to around $80 per barrel, Reuters reports.
“Four sources said on Saturday that some major oil companies and leading trading houses have suspended crude oil and fuel shipments through the Strait of Hormuz,” the agency said in a statement.
On Friday, Brent crude traded at around $73 per barrel, which is already 20% higher than at the beginning of the year.
William Jackson, chief economist for emerging markets at Capital Economics, said that even if the conflict is localized, the price of Brent crude could rise to around $80, which was the peak during the 12-day war in Iran in June last year.
On Saturday, the US and Israel launched strikes against Iran, targeting its leadership. “The strikes have caused concern in neighboring Arab oil-producing countries in the Persian Gulf, as fears of an escalation of the conflict have intensified, and Tehran has responded by firing missiles toward Israel,” the agency notes.
Iran is a major oil producer and is located across the Strait of Hormuz from the oil-rich Arabian Peninsula, through which about 20% of the world’s oil supplies pass. The conflict could limit oil supplies to the world market and cause prices to rise, Reuters writes.
On Sunday, OPEC+ may consider increasing oil production more than already planned.
