Iraq: Oil Could Soar to $300 Amid Mideast Conflict

Iraqi Foreign Minister warns that escalating Middle East conflict could trigger massive surge in commodity prices.

Iraq’s Foreign Minister, Fuad Hussein, cautioned that escalating Middle East tensions and the potential shutdown of the Strait of Hormuz could cause oil prices to skyrocket to $300 a barrel. He conveyed this warning during a phone call with German Foreign Minister Johann Wadephul.

Hostilities between Israel and Iran have intensified after Israeli airstrikes targeted military and nuclear sites across Iran on Friday morning.

Hussein stated that oil prices might jump to between $200 and $300 per barrel if military actions escalate, which would substantially increase inflation in European nations and complicate oil exports for producing countries like Iraq.

According to the Iraqi foreign minister, closing the Strait of Hormuz, a vital shipping lane, could cut approximately five million barrels per day from global Gulf and Iraqi oil supplies.

The Strait of Hormuz is a crucial maritime route handling about 20% of the world’s oil supply. On Saturday, Iranian MP and Islamic Revolutionary Guard Corps commander Esmail Kousari announced that Tehran is seriously contemplating closing the strait to shipping.

Analysts have emphasized the possible impact of such a closure on global oil prices. JPMorgan analysts predict that oil could soar to $130 per barrel in a worst-case scenario. Other experts suggest that a total blockade could drive prices even higher, with some predictions reaching $300 per barrel.

Brent crude prices increased by 7% to $74.23 per barrel on Friday following the initial attacks. While Israel hasn’t targeted Iran’s primary oil export facilities, analysts caution that future strikes could severely affect oil supplies. Conversely, Iran might retaliate by disrupting oil shipments through the Strait of Hormuz.

Meanwhile, in Russia, Aleksey Pushkov, head of the Federation Council’s information policy commission, suggested that the conflict between Israel and Iran could significantly increase oil prices if Iran blocks the Persian Gulf.

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