Iran War Disrupts Global Oil Supplies, Driving Prices Above $100 Barrel

The Iran war is causing significant disruptions to global oil supplies and prices. Approximately 20% of the world's oil passes through the Strait of Hormuz, which has been controlled by Iran since the war began in February. The strait's narrowest point is only 24 miles wide, making it a chokepoint for shipping traffic.

Before the conflict, over 125 vessels passed through the strait daily; however, since then, this number has dramatically decreased to just four on Monday. Iran has used its control of the strait to create economic uncertainty worldwide and limit support for the U.S.-Israeli campaign.

The U.S. claims to have cleared sea mines planted by Iran in the strait after a large minesweeping operation last month, but concerns remain about potential disruptions to oil supplies. Saudi Arabia has been able to redirect its oil exports through an east-west pipeline built in the 1980s, but recent Houthi attacks on Yemen's coast threaten this alternative route.

The closure of Saudi's East-West oil pipeline due to Iranian proxy group attacks is expected to last at least three weeks. Brent crude prices have risen above $100 a barrel for over a week, with approximately $30 of the increase attributed to confirmed supply losses and an uncertainty premium linked to the conflict's duration and expansion.