JAKARTA - Iran's war against the United States and Israel is now pushing the global energy market to an unprecedented point. The Guardian on March 12, quoted on Friday, March 13, reported that the International Energy Agency or IEA said this conflict had created "the largest supply disruption in the history of the oil market" after Iran's effective blockade of the Strait of Hormuz held millions of barrels of crude oil shipments every day.
The warning comes as oil prices have again broken through $100 a barrel, even though the IEA has ordered the release of 400 million barrels of emergency reserves - the largest since the agency was founded in 1974. The United States also increased pressure on the market by releasing 172 million barrels from its strategic reserves. However, this big move failed to calm the market. Brent fell to around $97, then rebounded after a statement from Iranian Leader Mojtaba Khamenei calling for the Strait of Hormuz "to remain closed".
According to the IEA, the war is expected to cut Middle Eastern oil and gas production by at least 10 million barrels per day. In a report quoted by The Guardian, the region's production decline could drag global oil production down by 8 million barrels per day this year, even if other countries, including Russia, increase production. The IEA also cut its global oil demand forecast by 1 million barrels per day due to reduced refining activity and air travel in the Middle East.
The pressure immediately hit the financial markets. Still launching The Guardian, on Wall Street, the Dow Jones and S&P 500 fell 1.5 percent. In Europe, the FTSE 100 and Stoxx 600 also weakened. The Tokyo and Australian stock exchanges also fell more than 1 percent. At the same time, a number of merchant ships were reportedly attacked around the Strait of Hormuz, one of the most vital trade routes in the world.
Amid the turmoil, Iran warned that oil prices could reach US$200 per barrel. Meanwhile, Donald Trump said the spike in oil prices could eventually generate "a lot of money" for the US, which is now one of the world's largest energy exporters.
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