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The global oil market is back in chaos after Israel launched military strikes against Iran on Friday. The move pushed crude oil prices up 8% to $74 a barrel in a matter of hours, shaking up inflation forecasts and triggering panic over future supply. The strike now threatens two critical lifelines: Iran’s own daily crude exports and the Strait of Hormuz, one of the most vital chokepoints for oil tankers in the world. Iran had already been seeing drops in its oil shipments before the attack. In May, the country exported 1.7 million barrels a day, based on figures shared by Bernstein, a brokerage. That’s a small slice—less than 2% of total global oil consumption—but in today’s energy market, even small cuts matter. With rising tensions, those exports are expected to dip further, and there’s no timeline for how long this disruption could last. OPEC increases output to stabilize the market The Organization of the Petroleum Exporting Countries (OPEC), where Iran is a founding member, has already moved to raise production. By the end of June, the group plans to push out an additional 960,000 barrels per day, reversing past cuts. Analysts tracking the cartel expect that to rise further to 2.2 million barrels daily, but that depends on how fast they act and how deep the damage to Iran’s export system goes. Even with that extra oil coming, the current supply balance is fragile. If Iran’s barrels disappear faster than OPEC can fill the gap, prices could shoot higher. Before the attacks, oil was already hovering between $75 and $80 per barrel depending on the month. Now, traders are bracing for those numbers to go out the window. But the much bigger risk lies offshore, not in Iran’s pipelines. The Strait of Hormuz, a narrow sea corridor between Iran…

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Filed under: News - @ June 13, 2025 4:26 pm