Iran War Disrupts Global Trade, Threatens Energy Markets
The ongoing war between the US and Iran has sent shockwaves through global trade, causing disruptions in energy markets, international shipping, insurance, supply chains, and prices. The Strait of Hormuz, a critical artery for world commerce, is at the center of the conflict.
The tensions began decades ago with US economic restrictions on Iran dating back to 1979 when President Carter froze Iranian government assets and imposed trade restrictions.
Since then, various administrations have tightened sanctions, including the Comprehensive Iran Sanctions, Accountability, and Divestment Act in 2010, which empowered the US to restrict access of foreign financial institutions engaged in transactions with sanctioned Iranian entities. The Joint Comprehensive Plan of Action (JCPOA) was negotiated in 2015 but ultimately fell apart when President Trump withdrew the US in May 2018.
The Iran war has transformed the economic landscape once again, particularly after the June ceasefire was broken and hostilities resumed. Treasury revoked an authorization for certain Iranian crude oil transactions on July 7 and substituted a wind-down license.