Wall Street Live

Middle East Tensions Threaten 20% of Global Oil Supply

By Mackenzie Crow

4/4, 06:33 EDT
  • Escalating tensions between Israel and Iran raise concerns about potential disruptions in the vital oil supply route through the Strait of Hormuz, impacting approximately 20% of global oil supply and potentially driving crude prices higher.
  • Ukrainian drone strikes have already taken 11% of Russia's oil refining capacity offline, contributing to a $6 per barrel increase in crude prices since mid-March. This, combined with Middle East tensions, poses significant risks to energy markets and the global economy.
  • While higher oil prices may challenge consumers and global growth, spare capacity offers some relief, mitigating the broader economic impact. Russia faces a mixed outlook with higher oil prices potentially offsetting losses but also presenting challenges such as costly refinery repairs and higher inflation.