If you thought your morning coffee was overpriced, wait until you see the latest numbers at the petrol station. Oil prices have skipped past $100 a barrel, and no, it is not because the world suddenly developed a deep, passionate love for crude. It turns out that playing “battleships” with actual cargo ships in the Southwest Asia is bad for business. Who would have guessed?
Iran is currently busy making sure the global economy feels as much “economic pain” as possible. Their method of choice involves aiming projectiles at commercial ships. The latest victim was a container ship near the UAE that caught fire after being hit by a mystery object. Two more tankers near Iraq also got a nasty surprise. It is a bold strategy to win friends and influence people, but it is certainly doing wonders for the price of a litre of fuel.
The Great Oil Leak
In a desperate attempt to stop us all from switching to bicycles, the International Energy Agency decided to release 400 million barrels of oil from their secret stash. The US chipped in 172 million barrels of that total. It was a lovely gesture, really. Unfortunately, the market looked at that massive pile of oil, looked at the closed Strait of Hormuz, and decided to stay terrified anyway.
Iran has vowed that not one single litre of oil will leave the Gulf while this war continues. They are even threatening to hit banks and “economic centres.” It is the kind of high stakes drama that makes a Hollywood thriller look like a documentary about knitting.
Commotion in the Ocean (and Air)
Meanwhile, the actual fighting is reaching a fever pitch.
- Missile Tag: Iran and Hezbollah sent waves of missiles toward Israel. Israel played a very expensive game of “intercept the threat” and then hit back at Tehran and Beirut.
- Beirut Under Fire: A strike on a car along the fancy seafront in Beirut killed seven people.
- Office Exodus: Big names like Citi and Deloitte are packing up their desks in Dubai and Saudi Arabia. Nothing says “everything is fine” quite like international consultants sprinting for the nearest exit.
Even Donald Trump waded in, claiming the oil price will come down “more than anybody understands.” We certainly hope he is right, because at this rate, we might all need to start training pigeons to deliver our mail.
The New Normal?
Analysts are now whispering that $100 oil might be our new best friend for a while. With drones heading for oil fields and the Gulf looking more like a no-go zone, the global economy is feeling a bit shaky. Iran says they are ready for a long war of attrition. The rest of us are probably just ready for a nap and a cheaper way to get to work.
The world is holding its breath to see who blinks first. In the meantime, maybe look into the resale value of a sturdy pair of walking shoes.
Related topics: Asia
