Escalation of U.S. involvement in war potentially triggers an oil price surge, according to expert predictions.

Soaring Oil Prices: Experts Warn of $100-Plus Rise if US Enteres Iran War

Escalation of U.S. involvement in war potentially triggers an oil price surge, according to expert predictions.

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A potential U.S. engagement in the Iran-Israel conflict could send oil prices skyrocketing beyond the $100 mark, according to energy experts. The Strait of Hormuz, a vital oil transportation route, is a primary point of concern.

If the U.S. decides to join the Iran war, oil prices could spiral past $100: As Manuel Frondel, an energy expert at the RWI-Leibniz Institute, explained to the "Rheinische Post", "If the U.S. actively engages in the conflict and it escalates, oil and gas prices may soar. Oil price increases to $100 and beyond are possible in an escalation—provided the conflict doesn't last too long and the Strait of Hormuz remains unblocked."

The price of the Brent crude oil has already surged from $68 to $76 per barrel, Frondel pointed out. He underscored that the Strait of Hormuz serves as a conduit for oil transport from Gulf states, representing around a fifth of the world's oil exports. Despite Iran's relatively minor role in global oil demand, covering only 2%, its potential disruption could have far-reaching impacts on the energy market.

Nuclear Catastrophe Concerns

Omid Nouripour, Iranian-German vice president of the German Bundestag, renewed his calls for de-escalation amid the mounting tensions between Israel and Iran. "The region's stability is at stake, and the consequences of an uncontrolled conflagration would be catastrophic, not only for Israel but for the entire region," Nouripour told the German Press Agency (dpa). "Now is the time for de-escalation. Moreover, the danger of a radioactive leak far beyond Iran's borders would have devastating consequences for humans and the environment."

Nouripour also criticized the Iranian leadership for neglecting civil defense measures, leaving the population in constant uncertainty and allowing central supply systems to deteriorate. He also denounced the Iranian government for intensifying repression, with increasing arrests and internet shutdowns aimed at stifling political opposition.

Nouripour emphasized the gravity of the threat posed by a nuclear-armed Iran. "The destruction of Israel has been Iranian state doctrine since 1979, and Israel has the right to defend its existence and security," he said.

source: ntv.de, mau

• Iran
• Iran Conflict
• Iranian Nuclear Program
• Oil Price
• USA

Insights

• Potential oil price surge: If the conflict disrupts Iranian oil production or impedes tanker traffic through the Strait of Hormuz, oil prices could soar from the current $73 per barrel to as high as $120 per barrel, representing a substantial 60% hike.[1][2]
• Gasoline prices in the U.S.: This rise in oil prices would proportionally inflate gasoline prices in the United States, with the average price per gallon potentially ballooning from $3.13 to around $5.13, leading to broad inflationary pressures across the U.S. economy.[1]
• Market volatility: The uncertainty surrounding the scale of escalation contributes to market volatility. The looming conflict might exacerbate the price increases already seen, particularly if it engulfs the Strait of Hormuz.[1]
• Global energy market impacts: The Strait of Hormuz's importance for oil exports necessitates consideration. Any disruption here would not only jeopardize Iranian oil but hinder the global supply chain.[2]
• Supply vs. infrastructure concerns: While global oil supply reserves might be sufficient to mitigate temporary disruptions in Iranian exports, the primary concern is bottlenecks in oil shipments through the Strait of Hormuz. Blockades or attacks on Gulf energy infrastructure could spark a significant shortage, inflating prices globally.[2]
• Geopolitical risk premium: The prospect of U.S. military intervention introduces a geopolitical risk premium to oil prices. Such intervention could escalate the conflict further, increasing oil shipping security risks and pushing prices even higher.[2]

1. In light of the potential disruption to oil production or tanker traffic through the Strait of Hormuz due to the Iran-Israel conflict, various employment policies within the oil and energy sector might need to be reassessed or adjusted to accommodate potential staffing shortages and infrastructure challenges resulting from heightened oil prices.
2. Given the far-reaching impacts of a conflict-induced oil price surge on the global energy market, community policies may need to be revised to address the potential inflationary pressures across various sectors, including employment, housing, and healthcare, to ensure equitable distribution of resources and minimize its adverse effects on vulnerable communities.

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