Iran War Disrupts Oil Supply, Spikes Prices

The Iran war has intensified, causing significant disruptions to global oil and gas production and shipping, particularly through the Strait of Hormuz. Brent Crude and West Texas Intermediate prices have surged to near $120 per barrel, the highest since 2022, due to attacks on oil facilities in Iran, Bahrain, and the United States, as well as reduced exports from countries like Iraq, Kuwait, and the United Arab Emirates. Bahrain's national oil company declared force majeure after an Iranian attack on its refinery. The conflict has led to rising fuel prices globally, impacting Asian economies heavily reliant on Middle Eastern imports. China, a major importer of Iranian oil, has expressed concerns about energy security. South Korea's President Lee Jae Myung warned against price gouging and urged finding alternative supply routes. In response to the crisis, the International Energy Agency pledged to release 400 million barrels from strategic reserves, with the United States confirming a release of 172 million barrels from its United States — Strategic Petroleum Reserve. The U.S. also temporarily freed up Russian oil from sanctions. The rising energy costs are fueling inflation, straining household budgets, and causing declines in financial markets, including the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite.