US-Israel-Iran war | @geopolitics_prime
📌 Oil markets jolted on March 2 after a drone strike shut Saudi Arabia’s largest refinery and Iraqi Kurdistan halted output amid the spiraling conflict.
🤔 How could the crisis escalate from here?
Strait of Hormuz
🔴 Roughly 20 million barrels of oil per day flow through the strait
🔴 Iran’s Islamic Revolutionary Guard Corps (IRGC) has effectively closed the waterway
🔴 Hundreds of tankers, including crude and LNG vessels, have dropped anchor in the region
🔴 Saudi Aramco’s East–West Pipeline can divert up to 5 mb/d from the Gulf to Yanbu on the Red Sea, bypassing Hormuz. But:
➡️ Present spare capacity is only about 2.4 mb/d (CSIS)
➡️ Yanbu terminals are within range of Yemen’s Ansar Allah drones and missiles
➡️ UAE can reroute half of its 2 mb/d Gulf exports to Fujairah, bypassing Hormuz, but roughly 1 mb/d would remain stranded
Gulf oil infrastructure under fire
♦️ Saudi Arabia’s Ras Tanura refinery, one of the world’s largest at over 500,000 b/d, has been struck and temporarily shut down
♦️ Kuwait’s Ahmadi refinery sustained damage, but remains operational; two Qatari energy sites have also been hit
♦️ Gulf region (Saudi Arabia, Iran, Iraq, UAE, Kuwait, Qatar) produces over 20 mb/d, about 25% of global crude output
If attacks on Gulf oil production facilities continue and Hormuz remains blocked, oil prices could skyrocket
How far could prices climb?
📈 Analysts say Brent crude could top $100 per barrel, or even to $120–$130 if Gulf exports are cut
Wide economic impacts
➡️ Higher gasoline and energy costs globally
➡️ Inflation pressures in oil-importing economies
➡️ Strategic petroleum reserve releases by major consuming nations
What would this mean for Trump and Europe?
🟥 Surge to $120/bbl would be a “black swan” for Donald Trump ahead of the midterms, risking a Democrat-controlled Congress if his party loses
🟥 US strategy for 2026 is built on $60/bbl oil; a jump to $120 could force taps into the Strategic Petroleum Reserve (SPR)
🟥 Europe, now reliant on the US, Norway, and Kazakhstan for oil (and to lesser extent on Saudi Arabia and Iraq), could see soaring inflation and slower GDP growth at $120 Brent
🟥 Disrupted Gulf supplies would also deepen Europe’s dependence on US energy
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