Hormuz shutdown ramifications: Oil price hike to hit $100 as Asia-Europe LNG battle looms
As the closure of the Strait of Hormuz, through which 15% of global oil and 20% of global liquefied natural gas (LNG) supply flows, evokes fears of a major energy shock, analysts at Wood Mackenzie, an energy intelligence group, have warned that oil prices could surge past $100 a barrel (bbl), if flows are not restored, echoing the price spikes seen during the onset of the Russia-Ukraine conflict.
Following the U.S. and Israeli strikes on Iranian government, military and nuclear facilities, Iran warned ships away and insurers withdrew coverage, halting tanker traffic. Wood Mackenzie believes that higher oil and gas prices are certain as the closure of the Strait of Hormuz threatens to disrupt 15% of global oil supply and 20% of global LNG supply, with oil prices potentially exceeding $100/bbl.
As a result, the energy intelligence group claims that the disruption creates a
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