A lecturer from the University of Houston has warned that disruptions in the flow of oil through the Strait of Hormuz could drive global oil prices as high as $150 per barrel. Speaking to Al Jazeera, the expert noted that the US Navy may not be able to fully secure tankers passing through the strategic waterway, raising fears of severe market disruptions.
Immediate Impact on Energy Markets
The lecturer, Hers, highlighted that the liquefied natural gas (LNG) market is already feeling the effects. On the first day of the attack, LNG prices surged by over 40 percent, and between Monday and Tuesday, natural gas prices in European countries nearly doubled.
Diesel prices have also increased sharply. Countries heavily dependent on natural gas are beginning to stockpile petroleum, which is affecting future orders in some US states.
Domestic Implications for the United States
Hers cautioned that the situation could significantly impact the New England region of the United States, potentially creating political and economic challenges for Donald Trump, particularly with the upcoming midterm elections.
The expert’s warning underscores the vulnerability of global energy markets to geopolitical instability in the Middle East and highlights the potential cascading effects on domestic economies, energy prices, and political landscapes.
