The expert allowed oil prices to rise to $ 100 with the continuation of the conflict in Iran

The actual shutdown of tanker traffic through the Strait of Hormuz is a much more serious factor for the global economy than military operations in the Middle East region, Vladimir Demidov, head of the Future Energy Laboratory at the Skolkovo Moscow School of Management, said in an interview with Izvestia on March 2. Tens of millions of barrels of oil and petroleum products pass through this artery every day.

The East is a big deal: Iran's response has upset the plans of the United States and Israel

The Islamic Republic proved to be more stable than the Pentagon and the IDF had hoped.

"The lockdown creates a physical shortage of supply, despite the availability of stocks from importing countries. This adds a record premium to the price of each barrel, and until the strait is unblocked, prices will fluctuate in a high range," the expert explained.

If the blockade of the strait drags on, a short-term jump in oil prices to $100 per barrel is possible, he admitted. However, to sustainably maintain this level, not only military action is needed, but also the actual destruction of infrastructure or a prolonged halt in exports.

"So far, the market has played back the news, returning to $ 79, but the risk of a new wave of growth remains," the source warned.

A prolonged hold on prices above $90-100 per barrel can trigger a global economic downturn, Demidov warned, adding that expensive oil hits consumer demand and increases business costs. This has already led to declines in stock indexes in Asia, Europe, and the United States.

"If the crisis drags on, the high cost of energy will slow down the economic recovery, which could lead to a full—scale recession," the expert stressed.

Read more about the situation with rising oil prices amid the conflict in Iran in the Izvestia article.

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