The renewed fighting between the US and Iran again jeopardizes global oil supplies, after stockpiles were drained earlier in the conflict.
“We’ve burned through all of the buffers we had. Everything,” one trader told the Financial Times. Energy markets had some slack to absorb the first shock, but that cushion is “smaller and shrinking further,” International Monetary Fund researchers wrote.
The industry is also anxious over the possibility that Iran could exploit another chokepoint in global commerce by closing the Bab el-Mandeb Strait at the entrance to the Red Sea, which has served as a critical relief valve for oil shipments from the region. Tehran “is willing to go all the way,” a Middle East scholar said.