Oil supply at risk from Iran conflict
Escalating conflict in the Middle East has shut down 6-7% of global oil supply, with analysts dubbing it an "asymmetric nightmare" for the US economy.
The conflict has already caused Brent crude oil prices to surge, briefly hitting over $100 a barrel. Some analysts predict prices could reach $120 per barrel if disruptions persist. Marine traffic through the Strait of Hormuz, a critical chokepoint for about one-fifth of global oil and liquefied natural gas consumption, has significantly decreased due to attacks on vessels. If the Strait were to close completely, global supply shortfalls could exceed 15 million barrels per day. The rise in oil prices is also impacting the dollar's value in global markets. This could further complicate the inflation outlook, potentially wiping out gains made earlier in the year.
