Will Iran’s Attack Lead to Higher Fuel Prices? 

Increased tensions in the Middle East may lead to higher fuel prices. Experts are expecting that Iran’s recent attack on Israel will potentially cause fuel prices to soar and disrupt global supplies if the conflict escalates further. Israel’s war cabinet has assessed military strategies for possible retaliation against Iran. Israel has declared its intent to retaliate and “exact a price” following the unprecedented drone and missile assault.

While oil prices initially surged in anticipation of such an escalation, they later stabilised. The International Energy Agency says that the escalating conflict underscores the vulnerability of oil markets. The recent attack by Iran also raises concerns about potential disruptions to shipping through the Strait of Hormuz. This is a critical passage for the global oil trade. Any significant disruption could have a profound impact on oil supplies and prices worldwide.

While the conflict presents risks to oil markets, factors such as production from non-OPEC+ countries may offer some relief in mitigating these impacts in the short term.

Oil prices have surged alongside escalating tensions in the Middle East this month. U.S. benchmark crude futures rose by 5%, while global benchmark Brent crude gained nearly 6%. The Strait of Hormuz remains a critical factor.” Iran’s ability to block the Strait of Hormuz is its secret weapon. The Strait serves as the world’s most important oil-transit chokepoint. Global oil inventories are already low, and any disruption to supplies could further deplete them, leading to higher oil prices.