Global Oil Prices Skyrocket as Middle East Conflict Continues

The recent Middle East conflict has exposed the vulnerability of global crude oil supplies. The US launched Operation Epic Fury against Iran, aiming to prevent it from developing nuclear weapons. However, Iran's retaliatory measures have sparked anarchy in the region, with hundreds of missiles and thousands of drones targeting Saudi Arabia and Kuwait.

The closure of the Strait of Hormuz has sent shockwaves through the global economy, causing crude oil prices to spike. According to IEA data, the waterway facilitates 20% of global oil consumption, with some 15 million barrels per day of crude oil passing through it in 2025. The disruption is 18 times larger than what was witnessed during the Russian-Ukraine conflict.

Crude prices have risen from $65 to over $120 per barrel, with experts predicting they could reach $150 if shipping through Hormuz is not allowed for another four to six months. The International Monetary Fund (IMF) and World Bank are warning that the conflict has halted global growth, which is expected to decline to 2.5% this year.