The world hasn’t seen oil at this price since the last time everything fell apart. Brent crude closed at $98.48 on Tuesday. One bad headline out of Islamabad and it crosses $100.
This time, there is no recovery story.
There is only a closed waterway and a war with no end date. The Strait of Hormuz carries 20% of the world’s oil and gas in normal times. Right now it is effectively shut. Only 16 ships crossed on Monday. Iran has been charging tolls of over a million dollars per vessel for those brave enough to try. The IEA has called this the largest oil supply disruption in the history of the global oil market.
The pain is spreading fast. European airlines are warning of flight cancellations this summer as jet fuel crosses $100 a barrel. A Paris to New York flight now costs $152 more per passenger in fuel alone compared to pre-war levels. The EU releases emergency jet fuel guidelines tomorrow.
American drivers are already feeling it. The national average hit $4.05 a gallon on Sunday. Energy Secretary Chris Wright told CNN it may not fall below $3 again until next year.
Trump called $98 oil “peanuts.” The rest of the world is calling it something else entirely.
Sources: CNBC, CNN, NBC News, Arab News
