Iraq Says Israel-Iran Conflict May Trigger Oil Price Hike
(MENAFN) Rising tensions in the Middle East, combined with the looming threat of shutting down the Strait of Hormuz, have raised alarms over a potential surge in oil prices to as high as $300 per barrel. This stark warning came from Iraqi Foreign Minister Fuad Hussein during a phone call with Germany’s Foreign Minister Johann Wadephul.
The flare-up began Friday morning when Israeli warplanes launched strikes targeting Iran’s military and nuclear installations, igniting an escalating cycle of conflict between the two nations.
Hussein cautioned that “if military operations were to break out, which would significantly increase inflation rates in European countries and complicate oil exports for producing states such as Iraq.”
A critical factor fueling this risk is the possible closure of the Strait of Hormuz, a vital shipping lane through which nearly 20% of the world’s oil passes. Hussein emphasized that shutting this passage could “result in the loss of approximately five million barrels per day from Gulf and Iraqi oil supplies in the global market.”
Adding to concerns, Iranian MP and commander in the Islamic Revolutionary Guard Corps, Esmail Kousari, revealed that Tehran is seriously contemplating blocking the strait to maritime traffic.
Financial analysts are sounding the alarm over the potential market chaos. JPMorgan strategists project that under severe conditions, oil prices could spike to $130 per barrel.
Meanwhile, other experts warn that a full blockade could drive prices as high as $300 per barrel.
Following the initial Israeli strikes, Brent crude surged 7% on Friday, hitting $74.23 per barrel.
While Israel has yet to target Iran’s primary oil export infrastructure, market watchers fear that further attacks might severely disrupt global oil supplies. In retaliation, Iran could respond by impeding shipments through the Strait of Hormuz, escalating the crisis.
In Moscow, Aleksey Pushkov, head of the Federation Council’s information policy commission, weighed in on the fallout, stating that the Israel-Iran confrontation may trigger a sharp rise in oil prices if Tehran decides to block the Persian Gulf.
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