U.S.-Iran War to Drive Up Oil Price Per Barrel

The Iranian war is driving up oil prices and as a logical consequence of the Persian Gulf largely being off-line since oil tankers travelling it have a high risk of being sunk by Iranian missiles and drones. With Iran’s oil and gas offline as well as Russian oil being proscribed with sanctions, and Venezuelan oil under the control of the U.S. government indirectly, several primary global oil supplies are temporarily reduced. Supply and demand is still in effect with the basic mitigating element being invention; shortages stimulate inventions of alternative product.

Ukraine stopped Russian petroleum products from flowing to Hungary and the Czech Republic, and plans to destroy pipelines in the Black Sea reaching Turkey- those are additional ways to put the squeeze upon Europe and Russia. Because Iran attacked a British naval post on Cyprus the U.K. has said it will support the U.S.-Israel war on Iran. Germany has also expressed an intention to provide support to the forces seeking to stop Iran’s nuclear weapons development. The high cost of gas at the pump in the U.S.A. may agitate Democrats and Zelensky hoping for a Republican loss in the mid-term elections in November, yet the cost of oil may be plummeting before November when voters decide with wallets and purses hoping Democrats as the sole alternative bring a deflating effect for consumers; though billions and billions would be spent on day care.

Saudi Arabia’s main refining and loading terminal is also on the Persian Gulf- Ras Tanura. Ninety percent of Saudi oil is exported through the Persian Gulf and with Saudi oil shipments temporarily suspended because of drone attacks on the refinery and on ships, even with a surfeit of world oil production normally, during the Iran and Ukraine wars oil prices are anticipated to go north of 100 dollars per barrel. That is good news for red states and yet not too bad for blue as they move more toward electric vehicles. The cost of sunshine is not expected to increase in 2026 unless more cloudy days develop.