Iran War Enters Prolonged Phase of Economic Disruption
The Iran war is no longer a short-lived energy supply shock but a prolonged test of global economic endurance. Crude oil prices have surpassed $100 per barrel, and markets are adjusting to a new phase of volatility.
US President Donald Trump predicted that the conflict would end after the US mid-term elections on November 3, but recent developments suggest this forecast may be overly optimistic.
The Houthis in Yemen have tightened their grip on the Bab el-Mandeb Strait, and drone attacks on Saudi Arabia's East-West oil pipeline have disrupted critical energy exports. The pipeline, which has been vital for Saudi Arabia since February, saw its shipments fall to just 2 million barrels per day in August.
The disruption to Middle East oil exports has sharply eroded global stocks, with inventories falling by 507 million barrels since the conflict began. The region's refined products, such as diesel and petrol, have fared worse than crude, with exports remaining nearly 60% below pre-war levels.