How the Iran conflict could disrupt the world’s oil supply

Shipping in the world’s most crucial oil chokepoint has nearly ground to a halt after at least four tankers were targeted in Iran’s retaliation to US and Israeli strikes on Saturday. Tehran also hit oil facilities in Saudi Arabia and Qatar on Monday, raising the prospects that conflict cripples the global flow of oil.

Roughly 21 million barrels of oil – about 20% of the world’s total supply – pass through the Strait of Hormuz each day, mostly originating from Iran, Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates, and much of it bound for Asia and Southeast Asia.

Iran says it doesn’t intend to close the strait, but ships began dodging the waterway almost immediately after strikes began – vessel traffic through it plummeted 70% on Saturday.

All these strikes have jolted oil markets, with the benchmark Brent crude price jumping 8% on Monday, peaking at nearly $79 per barrel. At the time of publication, it’s hovering around $76 a barrel. In the days before the war, Iran’s oil exports actually doubled their recent average, and they appear to be continuing unabated despite the conflict. Most of it goes to China.