consumers and businesses worldwide facing weeks or months of higher fuel prices even if the week-old conflict ends quickly, as suppliers grapple with damaged facilities, disrupted logistics and elevated risks to shipping. Iran also named Mojtaba Khamenei to succeed his father Ali Khamenei as Supreme Leader, signalling that hardliners remain firmly in charge in Tehran a week into its conflict with the United States and Israel. The second week of the ongoing conflict saw Iraq and Kuwait begin to cut oil output, adding to earlier liquefied natural gas reductions from Qatar, as the war blocked shipments from the Middle East through the closure of the Strait of Hormuz, which about 1 / 5th of supply flows through.
Figure 4: Crude Oil WTI USD / BBl( https:// tradingeconomics. com / commodity / crude-oil)
Now into the third week of the conflict, prices have come back down to around ~$ 103 as the IEA agreed to release 400 million barrels of oil, the largest emergency release ever recorded as a result of the supply shock. President Donald Trump has called on other nations such as China, Japan, France, South Korea & others to send warships to the area to help secure the shipping channel as prices rise around the world as a result. Strikes are still ongoing, with the US now threatening Kharg Island, a major oil depot for Iran. It ' s unclear how soon the the war will end, even with assurance that the war will end soon, a quick resolution to the conflict would see weeks of prolonged market disruption. OPEC ' s biggest producer Aramco has shut production of two large offshort fields reducing output by 20 %. The second highest producer, Iraq, production has dropped 70 % and UAE output has halved. Qatar has fully shut its liquified natural gas production, about 20 % of LNG supplies.