US and Israeli strikes on Iran could disrupt global crude oil supplies, driving prices to multi-year highs, warns AFP. Iran, a top-10 producer, outputs 3.1 million barrels per day (bpd) despite sanctions slashing production from 1970s peaks of six million bpd. It holds the world’s third-largest reserves, with low extraction costs of $10 per barrel — far below Western levels of $40–60 — making high prices hugely profitable for its oil-dependent economy.
Exports hover at 1.3–1.5 million bpd, mostly to Chinese “teapot” refineries evading US sanctions revived under Trump. The gravest threat Iran blockading the Strait of Hormuz, through which 20 million bpd (20 per cent of global consumption) flowed in 2024. Narrow (50 kilometres) and shallow (60 metres maximun), it’s highly vulnerable; security fears alone would spike insurance premiums, halting tankers.
Only Saudi Arabia and UAE have limited bypasses (max 2.6 million bpd). Neighbors like Gulf states, Türkiye, and Pakistan hosting US bases fear Iranian missile retaliation on oil hubs, power plants, and desalination facilities. Skyrocketing prices — potentially $100/bbl — could reignite global inflation, hammering economies.
AFP
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