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From CBS News: The U.S. military strikes in Iran are raising questions about the impact on supplies of oil and gas, including whether the widening conflict could result in higher energy prices for Americans.
The price of the West Texas Intermediate crude, the U.S. benchmark, jumped 4% on Sunday night shortly after the start of trading, but fell more than 7% on Monday afternoon. The decline came as experts speculated that Iran is unlikely to close the Strait of Hormuz, a major commercial waterway that the country partly controls and that is strategically vital for the flow of crude into global markets.
Iran’s parliament on Sunday approved cutting off the Strait, leaving the final decision to the country’s national security council.
The Strait of Hormuz, just 21 miles wide, is vulnerable to disruption. It connects the Persian Gulf to the Gulf of Oman and the Arabian Sea.
CBS News talked to David Oxley, chief climate and commodities economist at Capital Economics, about Iran’s activities regarding the Strait.
“In practice, Iranian efforts to ‘close’ the Strait could encompass a number of actions including attacking and detaining ships using the waterway, impeding navigability through the strait and, at the most extreme, laying mines in the sea,” Oxley said.
“[S]o long as the conflict does not become a long-lasting war with no ‘off ramp,’ and disruption in the Strait remains limited to the lower-level actions seen up to now, we suspect that any initial spikes in global energy prices would dissipate before long,” he said.
Wall Street experts predict Iran won’t close the Strait of Hormuz, but ongoing tensions could disrupt the energy market and drive prices up. While experts don’t believe a closure is likely, if they did disruptions would send energy prices soaring.
The EIA, a U.S. Department of Energy branch, said disruptions to oil passing through the channel would severely impact markets in China, India, Japan, and South Korea.
The price of oil has tanked today as Iran’s impotent response to American attacks has demonstrated they don’t have the ability to escalate conflict. pic.twitter.com/MX0wnZRf3S
— Clay Travis (@ClayTravis) June 23, 2025
The information listed is from CBS News.
