Iran conflict: Why has oil stayed near $100 a barrel? | US-Israel war on Iran
Global Economy Faces Continued Pressure Despite Avoidance of Major Oil Crisis
As the conflict in Iran surpasses the 100-day mark, the global economy grapples with persistent inflation and slowed growth, even as a worst-case scenario for oil supply has been narrowly averted. Currently, disruptions remain significant, with approximately 20% of the world’s energy flows impacted—a situation described by experts as one of the largest supply shocks in history.
Oil prices hover around $100 per barrel, a rate analysts caution could skyrocket if the situation in the Strait of Hormuz deteriorates further. Some forecasts suggest prices could exceed $200 per barrel, potentially igniting a global economic crisis.
In response to the ongoing disruptions, various nations have tapped into their strategic reserves, and oil exporters have sought alternative shipping routes. Additionally, a decrease in demand has contributed to stabilizing prices, though these relief measures may begin to wane.
The Organisation for Economic Co-operation and Development (OECD) has issued warnings that the ramifications of the conflict could extend well into 2027, even if the situation resolves immediately. The prolonged energy supply challenges underscore the fragility of current economic conditions.
