Israel-Gaza Conflict Risks Sparking Wider Mideast Crisis, Threatening Global Oil Supplies
-
Israel's assault on Gaza risks sparking a wider conflict involving Iran and its proxies, which could disrupt global oil supplies.
-
Iran could retaliate through oil embargoes or attacks on infrastructure in Saudi Arabia, UAE, and Kuwait. This could cause oil prices to spike.
-
Higher oil prices would mean higher gas prices for American consumers. A blockade of the Strait of Hormuz would be especially risky.
-
The oil market has some slack capacity currently, but it is politicized due to sanctions on countries like Venezuela and Iran.
-
The U.S. has options like releasing strategic reserves, but is limited as an exporter. Saudi Arabia has more capacity to increase supply quickly.