The Effect of the Iran War on Oil Prices

As a result of the United States and Israel launching a war against Iran on February 28, oil prices around the world have surged. Since the start of the conflict, the price of crude oil has increased almost 50 percent, with a corresponding increase in gas prices of $1/gallon or more. Why have prices increased so much?

The key factor is Iran’s control of the Strait of Hormuz, a section of the Persian Gulf between Iran and the United Arab Emirates (UAE). Normally, one-fifth of the world’s oil passes through this strait, traveling from oil-producing nations like Kuwait to world markets. However, since the start of the war, Iran has effectively closed the Strait of Hormuz to ship traffic, laying mines and threatening to attack ships with drones. With this choke point restricting the world’s oil supply, prices have risen in response.

Through booms and busts, through major geopolitical events, Wood Oil Company has been here for our clients. We’ll offer guidance on how to minimize prices as much as possible, considering the current conflict. When you buy from us, expect reliable service and quality fuel every time.