Oil begins its climb

The Middle East conflict backed by the United States and Israel will push inflation higher worldwide.

The Brent crude benchmark, used in Europe, has risen 9.7%, hovering around $80 per barrel. The U.S. benchmark, WTI, is up 9.3%.

So far this year, crude oil has gained close to 30%. Even steeper is the jump in gas prices: the European TTF contract, traded in the Netherlands, has surged more than 20%, reaching €39 per megawatt hour.

The war brings economic consequences worldwide

The U.S. and Israeli offensive against Iran has focused attention on the Strait of Hormuz, the maritime chokepoint through which 20% of the world’s oil and liquefied natural gas passes.

• Anticipated cost increases and the risk of supply shortages drove oil prices up about 13% during the early European trading session, before easing to around 10%—the steepest rise in four years.
• There is growing fear that a conflict between the United States and Iran could spiral out of control, causing a significant interruption of crude supplies.

Through the Strait of Hormuz, a route controlled by Iran, roughly one‑fifth of global maritime trade in oil and LNG flows:

• 14.5 million barrels of oil transit the strait on average.
• 90% of this volume is destined for Asia.
• 4% goes to Europe.
• 4% heads to America.
• The remaining 2% is shipped to Africa.