Oil plunges 4% after Iran's attack to U.S. bases
The oil market was shaken Monday following Iran's attack on U.S. military bases in Qatar, with U.S. crude oil falling 4.1% to $70.78 per barrel.
The oil market apparently accelerated on Monday, after Iran attacked U.S. military bases in Qatar. American crude oil fell by 4.1 percent, reaching $70.78 per barrel. On Sunday, a 6 percent increase was registered, reaching $78.
Despite the approval of the closure of the Strait of Hormuz by the Iranian parliament, experts did not foresee a big impact on American or European petroleum, if the attacks between U.S. and Iran continues. Hormuz accounts for 20 percent of the world’s oil market, and its closure could be devastating.
What would happen if Iran closes the Strait?
According to some experts, it is unlikely that Iran will close the Strait of Hormuz. This corridor passes through Iran, Oman, and the United Arab Emirates, and it is only about 50 km wide at its entrance and exit. However, the main importance is that the strait connects the Gulf with the Arabian Sea.
But if Iran closes the strait, it will have a big impact on the world economy. According to the U.S. Energy Information Administration (EIA), around 20 million oil barrels passed daily through the Strait of Hormuz during the first half of 2023. If Iran finally decides to block it, the price of oil will increase worldwide.
President Donald Trump, on his account of Truth Social, warned about the oil increases. Photo: Truth:@realDonaldTrump
ALSO SEE: Iran attacks US military base in Qatar
Trump warned about the prices
President Donald Trump already warned about possible increases in petroleum prices. On his Truth Social account, he posted: "To the Department of Energy: DRILL, BABY, DRILL!!! And I mean NOW!!!" After that, he warned about keeping the oil prices down, saying that is what the "enemy" wants and emphasizing that he is personally watching the companies.
Secretary of State Marco Rubio, in a Fox News interview, asked China to try to stop an eventual blockade, saying that the Asian giant depends on the strait for their economic activities. "If they close the strait… it will be economic suicide for them. We have options to deal with that, but other countries should also pay attention. It would affect them economically much more than us," he stated.
