Once again there is a fear of deepening oil crisis in the world. The International Energy Agency (IEA) has warned that if the tension between America and Iran escalates into a major war, it could have a direct impact on the world’s oil supply and fuel prices.
IEA says that at present the global oil market is gradually stabilizing, but increasing tension in West Asia can reverse this improvement at any time. If oil production or sea routes in this region are affected, the worldwide supply of crude oil may decrease and petrol and diesel may become expensive.
Concern increased due to closure of Hormuz Strait
According to IEA, the biggest danger is related to Hormuz. This is one of the most important maritime oil routes in the world. Every day, a large amount of crude oil reaches different countries of the world from here. According to the report, if Hormuz is closed, the supply of about 14 million barrels of crude oil daily may come to a halt. Stopping such a large amount of supply could create a fuel shortage in the world and lead to a sharp rise in oil prices.
The world economy may be affected
West Asia is among the world’s largest crude oil exporting regions. Therefore, any kind of military conflict in this area can have not only regional but also global impact. If the production of oil producing countries decreases or the movement of sea vessels is disrupted, the availability of crude oil across the world will reduce. Its effect can also be seen on the prices of petrol, diesel, aviation fuel and gas. Experts believe that expensive fuel can have a direct impact on the pockets of common people, transportation costs and inflation.
Currently enough oil, but danger remains
IEA has said that at present there is sufficient availability of oil in the global market and at present the supply remains normal. However, the agency made it clear that the market is still very sensitive. If tensions between America and Iran increase further, the current balance may deteriorate within a short time. The report says that geopolitical risks remain the biggest concern for the oil market at present.
Relief may come from OPEC+ and other countries
According to the report, the member countries of the OPEC+ group are gradually withdrawing the production cuts made earlier. If needed, they can provide additional crude oil in the market. Apart from this, many oil producing countries outside OPEC are also increasing their production. With this the supply shortage can be compensated to some extent. But the IEA says that if oil exports from the Gulf region are affected or major sea routes are disrupted, even additional production will not be able to fully handle the situation.
Volatility may increase in oil prices
IEA has said that at present the situation in the oil market appears normal, but investors and governments are continuously keeping an eye on the developments happening between America and Iran. If the military tension between the two countries increases further, then huge fluctuations may be seen again in the global oil market. Due to this, crude oil prices may increase rapidly and inflationary pressure may also increase in many countries. Experts believe that in the coming days, the situation in West Asia will play an important role in determining the direction of the global energy market.
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