Oil prices could top $90 as Israel-Iran conflict escalates tensions in Middle East – but Iran may close the Strait of Hormuz and create worldwide chaos

YahooFinance reports: “On Friday, West Texas Intermediate futures and international benchmark Brent crude settled at $72.98 and $74.23 per barrel, respectively. Both pared overnight gains that saw prices spike more than 13%.”

YahooFinace cites specialists expecting that the oil price per barrel will remain above $90 for as long as Iran reduces or stops its oil exports.

What the main media do not speak about, as well as YahooFinance omits:

The Strait of Hormuz, positioned in between the Persian Gulf and the Gulf of Oman, is a narrow but critical sea route that approximately one-third of global oil trade, accounting for 17 million to 20 million barrels of crude oil and condensate passes through daily.

The Strait of Hormuz is easily controlled by Iran, any threat to oil transports will halt automatically oil shipping through that Strait. One third of the World’s oil, not only Iran’s exports, may halt abruptly which may result in a chaotic price increase.

Around 70% of oil volume goes to Asia via this Strait, with China, Japan, India, South Korea, Singapore, Thailand, Pakistan, and the Philippines among the largest recipients, according to the International Energy Agency.

Oil specialists confirm: “If Iran blocks this narrow chokepoint, it could affect up to 20-30% of global oil flows.” “A closure would likely send oil prices above $100.”

Oil can even jump to $1’000 per barrel in case of a concerted action of Russia, China and Iran, as suggested by analysts.

And Saudi Arabia is strongly condemning the attacks of Israel on Iran, therfore, what will be the reaction of Saudi Arabia? Behind Saudi Arabia, a part of the Arab World will act in the same way.

The closure of the Strait of Hormuz by Iran will be an “absolute nightmare”.

Considering that Iran is an ally, or at least a close trading partner of China, it will need a coordinated action between Iran and China and a need to compensate China for the loss of deliveries from the Gulf. It is unknown if China as already prepared alternatives for such events. One rout to increase is, of course, delivery of Russian oil to China.

As there is already a substantial infrastructure in place to ship Russian oil to China, the closure of the Strait may be compensated to a good part. The Russia-China ESPO pipeline has a huge capacity and port and loading facilities in the East can be used for large tankers.

In addition, Russia sells gas to China via the powerful Power of Siberia pipeline which China completed and connected in 2024.

Russian gas and oil can therefore, find easily its way to China and China may survive quiet well the closure of the Strait of Hormuz if Iran proceeds in a coordinated operation with China.