The global energy crisis caused by President Donald Trump’s war with Iran will worsen in the coming months as The Wall Street Journal reported Friday that the world is “burning in it oil safety net.”
Although oil prices spiked at the start of the war, prompting Iran to close the Strait of Hormuz to commercial shipping, that surge was temporarily tempered by crude gluts that allowed countries to add more oil to the market.
However, the Gazette reported that these reserves are being depleted at an unprecedented rate, with inventories falling by nearly 250 million barrels in the first two months of the conflict alone.
That rapid withdrawal has led oil executives and analysts to warn that “a harsh reckoning will worsen the relative calm in energy markets” as “acute shortages of key fuels and soaring prices could emerge within weeks if the Strait of Hormuz remains closed,” according to the Journal.
The newspaper cited a report from consulting firm Eurasia Group that estimates that, at the current rate of depletion, US oil reserves will fall below 100 million barrels for the first time in 23 years by the end of this month.
Ellen Wald, senior fellow at the Atlantic Council’s Global Energy Center, told the Journal that while the increased oil price would be partially offset by a decline in consumption, the sheer scale of the coming supply crunch is so great that prices will continue to rise.
“You can only reduce consumption so much, and when inventories run out, they will run out,” Wald explained. “At some point the market will crash and prices will go up.”
This problem could be further exacerbated if Trump decides to renew attacks on Iran, which could lead to devastating Iranian counterattacks on oil production facilities across the region.
Zeteo reported on Thursday that “preparations for an imminent new phase of Trump’s war on Iran have accelerated,” as the president “has grown increasingly frustrated with the state of peace talks.”
According to Zeteos sources, the US military The campaign will ramp up shortly after Trump returns from his visit to China, with options including “a potential new massive bombing campaign against the Iranians.”
The US military bombed Iranian military and civilian targets infrastructure during the first weeks of the conflict, but the country has still refused to reopen the Strait of Hormuz.
With peace talks stalled and the prospect of renewed hostilities on the table, PRICE Brent crude oil futures rose on Friday, crossing more than $108 a barrel.
Average gas prices in the US remained above $4.50 on Friday, and oil industry analyst Patrick De Haan evaluated on Thursday that prices could soon jump to over $5 a gallon if the Strait of Hormuz is not opened soon.
