The second wave of the US-Iran conflict shows no signs of letting up.
Attacks by the Houthi militia have threatened to curtail shipping through the Red Sea
Russia’s refineries are buckling under the weight of bombardment by the Ukrainian military. For global oil markets, already in a precarious situation, critical logistical nodes just keep getting thwarted. Things keep going wrong.
Oil prices have started rebounding in return, reaching levels not seen since the first weeks of June before the signing of the US-Iran memorandum of understanding, with international Brent futures (BZ=F) nearing $100 per barrel. “If a ceasefire does not materialize,” Rystad Energy head of geopolitical analysis Jorge León said, “the risk of a significant rebound in oil prices would be substantial.” As the war between the US and Iran initially began in late February, attention swung toward the Strait of Hormuz, a critical waterway responsible for roughly a fifth of the world’s oil trade. Threats of violence and, eventually, direct attacks on vessels by Iranian military wings sent traffic through the strait collapsing, kicking off the largest energy supply crisis on record. Six months down the road, as the conflict has reignited, the danger for the global oil market has diversified, no longer concentrated in a single waterway or oil-producing country.