Oil, War, And The Strait of Hormuz: Can Washington Safeguard Global Energy Markets From Iran?

"About one-fifth of global oil and liquefied natural gas (LNG) normally flows through the narrow waterway connecting the Persian Gulf to international markets. Yet tanker traffic has slowed sharply amid security concerns, military threats, and reports that Iran is deploying mines and other asymmetric measures to inflict damage on vessels attempting to use the Strait."

"Already the market response has been seen: oil surged toward $120 per barrel before retreating slightly while aviation fuel prices remain around double the levels seen in January. For analysts, these swings underscore a fundamental question: Can Tehran leverage the global energy system as a strategic weapon -- or can the United States and its partners prevent that scenario?"

"What we're seeing is minute-by-minute, hour-by-hour market reactions to the scale and duration of the conflict. Before the crisis, oil markets anticipated a supply glut and relatively low prices. The sudden threat to the Strait of Hormuz -- through which roughly 20 million barrels of oil and petroleum liquids move daily -- upended that outlook."

The Strait of Hormuz, a critical energy chokepoint connecting the Persian Gulf to international markets, faces significant disruption risks amid US-Israel-Iran tensions. Approximately one-fifth of global oil and liquefied natural gas normally transits this narrow waterway. Iran has deployed mines and asymmetric measures to damage vessels, while tanker traffic has slowed due to security concerns and military threats. Oil prices surged toward $120 per barrel, and aviation fuel prices doubled since January. The US military destroyed 16 Iranian mine-laying ships on March 10, yet three commercial vessels were reportedly hit by explosions on March 11. Market analysts indicate current price swings reflect uncertainty pricing rather than actual supply disruptions, with oil markets previously anticipating a supply glut.

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