How 6 Months of War in Iran Jolted Oil, Gas, Stocks and More
New York Times · LC · trust 50/100
Six months later, the war has locked into a fragile holding pattern. Oil is getting out, but less of it, and gas prices remain high. Ships are moving but fewer than before the war, and through different routes. Investors in stocks and bonds have turned their attention — mostly — to other issues.
Here’s where markets stand after six months of war.
At $89 a barrel, oil costs 23 percent more than it did before the war, driving up prices for everything from gasoline to plastics.
But had you asked most energy executives six months ago to predict oil prices after such a long conflict over the Strait of Hormuz, they would have picked a much higher number. The global economy has been surprisingly adept at getting by without all of the energy it used to buy from the Persian Gulf, one of the most important oil-producing regions in the world.
There are a few reasons for that. Countries that are highly dependent on oil from the Middle East cut back. The Trump administration and other governments withdrew oil from strategic reserves. Companies across the Americas pumped more oil than expected, and many of those in the Gulf found ways to export oil despite the dangers of traveling through the strait. And in a move that few anticipated, China — typically the world’s biggest oil importer — slashed purchases .
Looking ahead: Where prices go from here will depend on, among other things, how long the United States and Iran continue to interfere with traffic in the strait and whether China starts importing more oil. For now, though, the market appears to be settling into a new normal. The bigger concern is that wars — in the Middle East and between Russia and Ukraine — have knocked out refineries, leaving the world with less capacity to turn oil into gasoline and diesel and making those fuels much more expensive.
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