Global oil prices continue to rise despite a handful of ships managing to pass through the Strait of Hormuz.
This is because the blockade has triggered supply disruptions that can take months to recover from.
The strait, which is responsible for controlling the traffic of 20% of the world’s crude oil and liquid natural gas, has been effectively closed despite occasional ship passages.
Even with the authorities allowing more vessels to pass through, the risks are still extreme. Missiles, drones and naval mines have turned this property into a war zone.
Insurers unwilling to accept liability are refusing to underwrite trips, creating what experts describe as “insurance-driven shutdowns.”
Furthermore, attacks on oil installations throughout the region have disrupted oil production in several places, thus limiting the amount of oil that can be moved.
The destruction of oil infrastructure, which was mainly caused by retaliation by Iran and its neighbors in the Gulf, has resulted in supply shortages that cannot be resolved quickly.
Consumers are already bearing the negative consequences of that.
US benchmark West Texas Intermediate crude hit $112 a barrel, the highest level since 2022.
With Trump having no clear exit plan, analysts warn that high prices could be the new normal for the foreseeable future.
