Following U.S. air strikes over Iran, the latter has retaliated by closing down the Strait of Hormuz. To oversimplify things, it could trigger yet another energy crisis.
Aside from Iran, oil-producing nations such as Iraq, Saudi Arabia, and the United Arab Emirates use the strait to export liquid gold from their respective countries. We’re already beginning to see the effects of the closure. At the time of writing, Brent crude rose about 7 percent, pushing prices to $78.25 per barrel.
Alternate routes are available, but the volatile situation in the Middle East isn’t helping matters. It’ll be more expensive to transport, for starters, and taking the Red Sea isn’t exactly the safest option, either. With the way things are going, experts fear the possibility of crude oil reaching — or even breaching — the $ 100-per-barrel mark. If so, plans to loosen federal fuel efficiency standards could take a back seat if push comes to shove.
