Oil Prices Rise as Tensions Around Iran Grow

A new conflict that started three days ago has already pushed up oil and gas prices in the United States and around the world. The fighting began with attacks on Iranian targets, including its leader, and Iran has struck a range of sites in neighboring countries such as Saudi Arabia and Qatar. Those attacks hit oil refineries and liquefied‑natural‑gas plants, forcing some companies to halt production. The Strait of Hormuz, a narrow waterway that lets about one‑fifth of global oil and LNG move between the Persian Gulf and the Arabian Sea, has seen a sharp drop in tanker traffic. Last Sunday only five tankers passed through the strait, compared with about sixty per day before hostilities started. Analysts say short‑term cuts can be absorbed, but a week or more of reduced traffic could cause the biggest supply shock in history.Gas markets may feel an even stronger hit because most countries keep smaller gas inventories than oil. Europe and Asia could see sharp price jumps, while the United States, as a large producer and exporter of gas, would be less affected. However, the United States still imports a lot of crude oil for refining, so higher global oil prices will raise gasoline costs at home. If the price rise lasts only a few weeks, the impact might be limited. But if it persists for months, the effects could go both ways: higher gasoline prices might push more people toward electric cars, while also encouraging U. S. oil companies to drill harder. Current data show U. S. domestic oil production fell for a second month in a row, suggesting that higher prices could change the balance of supply and demand. Environmental groups argue that this volatility highlights why we need to shift away from fossil fuels. They warn that the war’s effect on energy markets will raise costs for consumers everywhere, making a cleaner transition even more urgent.