Middle East Oil Risks Trump US-China Tensions: IIF

The Middle East's oil risks are now more pressing than the strategic competition between the US and China, according to Ashok Bhundia, Deputy Chief Economist at the International Institute for Finance (IIF). As of September 30th, 2026, dwindling inventories of oil and diesel around the Strait of Hormuz pose a significant threat to global markets. This is particularly concerning due to elevated crack spreads, which are driving cost-push inflation.

Bhundia warns that these high crack spreads could trigger a sudden market shock if left unchecked. The current situation highlights the importance of addressing the underlying issues in the Middle East's oil supply chain rather than focusing solely on geopolitical tensions between major powers.