Oil prices soar as tensions rise in Middle East
Oil prices just shot up, with Brent crude crossing $100 a barrel for the first time since 2022.
The reason? The Strait of Hormuz, a key route for global oil, has basically shut down thanks to rising tensions between Iran, Israel, and the US
With tankers stuck or rerouting, markets everywhere are feeling the squeeze.
The Strait of Hormuz is critical for global oil supply
The Strait of Hormuz handles about 20% of the world's oil supply.
Right now, tanker traffic has nearly stopped due to threats from Iran's Revolutionary Guard and risks like drones and missiles.
Insurance companies have pulled out too, making it even riskier (and pricier) to move oil through this area.
Ships are now rerouting, adding thousands of miles
With ships avoiding the strait, they're detouring around Africa's Cape of Good Hope—adding thousands of miles and causing major delays.
This has sent shipping costs through the roof, especially with high demand from places like China and India.
What else is at stake?
It's not just oil: Qatar's liquefied natural gas exports (about 20% of global LNG) are also at risk, with about one-third of the world's fertilizer shipments transiting the Strait, and substantial volumes of aluminum and sugar also moving through the route.
US gas prices have already climbed to $3.10 per gallon on average—and could hit $3.50 soon if things don't calm down.