The U.S.-Israeli war with Iran has triggered the largest supply disruption in global oil market history, according to a Thursday report from the International Energy Agency, as tensions escalate along a critical waterway for international trade.
The Strait of Hormuz, a critical waterway responsible for carrying roughly 20 percent of the world’s oil supply, has seen oil and product flows plunge from around 20 million barrels a day to “a trickle,” the agency wrote. The price of oil has also “gyrated wildly” since the start of the war, the report read.
Rising energy costs have been a central focus of the Trump administration since the beginning of the U.S.-Israeli operation in February. The White House has said it could offer naval escorts and political risk insurance for tankers passing through the Strait of Hormuz. The president has also loosened sanctions on India’s acquisition of Russian oil.
Still, global oil supply will likely drop by 8 million barrels per day in March, according to the IEA, with “direct damage to energy infrastructure” also contributing to supply shocks.
