World oil prices could rise sharply if the escalation of the Middle East conflict drags on for a long time.
“If the Middle East conflict drags on and the Strait of Hormuz is closed again or the seizure of tankers on the approach to the Red Sea intensifies, oil prices will soar due to increased costs of logistics and insurance,” Kyle Shostak, CEO of the Navigator Principal Investors company, said.
According to Shostak, given the current situation in the region, “this scenario is very relevant.”
Continuous attack slowing down economic activity
Jerrymusa.com report that Following the escalation of the Palestinian-Israeli conflict in the Gaza Strip, Yemen’s Houthi rebels have said they will carry out attacks on Israeli territory and will not allow associated ships to pass through the waters of the Red Sea and the Bab el-Mandeb Strait until the operation in the Palestinian enclave is stopped.
In response, US authorities launched the Prosperity Guardian operation in the Red Sea to ensure freedom of navigation and the security of ships.