**Iran’s Threat to Global Oil Supplies: A Possible Boon for Russia’s Ukraine War Efforts**
In a move that could send shockwaves through the global economy, Iran is reportedly preparing to mine the Strait of Hormuz. This would be a significant escalation in tensions between Iran and Israel, which have been locked in a conflict over the past few weeks.
According to Reuters, Iran has loaded naval mines onto vessels in the Persian Gulf, citing two U.S. officials who detected these preparations after Israel launched its “preemptive” attack against Iran on June 13. The Strait of Hormuz is a critical waterway that connects the Persian Gulf to the Arabian Sea and accounts for one-fifth of global oil demand.
If Iran were to block this strait, it would have serious implications for global oil prices. As John Gawthrop, Argus Eurasia Energy editor, explained to us, “Any disruption to Gulf supplies would push up global crude prices.” This, in turn, would give a significant boost to the Russian economy and its war machine in Ukraine.
**Russia’s War Efforts Get a Possible Boost**
Russia’s energy sector is a critical component of its economy, making up 35-40% of its budget revenues. The country’s energy sector has been hampered by Western sanctions and the G7’s Russian oil price cap of $60 per barrel, which have resulted in Russia losing more than $150 billion over the last three years.
However, if Iran were to mine the Strait of Hormuz, global oil prices could surge again, potentially giving Russia a reprieve from its economic woes. Brent crude, the global benchmark, jumped from $69.36 to $75 per barrel on June 13, when the conflict between Israel and Iran escalated. While prices have since settled, another spike would follow if Iran were to block the Strait of Hormuz.
**Iran’s Motivations**
This move by Iran would likely be a last resort, as it would also mean blocking its own oil exports. David Fyfe, chief economist at Argus Media, noted that “this would only be a last resort from Tehran.” The motivations behind this move are unclear, but it would undoubtedly have significant implications for the global economy.
As tensions between Iran and Israel continue to escalate, it remains to be seen what impact this could have on the world stage. One thing is certain: if Iran were to mine the Strait of Hormuz, the consequences would be far-reaching and potentially devastating for the global economy.
Read More @ kyivindependent.com
