Amid the conflict between Israel and Iran, discussions have resurfaced about a possible blockade of the Strait of Hormuz – a key route for exporting oil from the Middle East to Asia. The strait accounts for 21% of the world's daily oil consumption, and any blockade of this narrow waterway could have severe consequences. Only Saudi Arabia and the UAE have pipelines that can bypass this route, but even they cannot fully compensate for supply disruptions if the strait is blocked.

Should the situation escalate, a disruption in traffic through the strait would threaten the supply of 14 million barrels of oil per day. If the strait were to be closed for a month or more, a dramatic spike in oil prices could occur, with the cost of Brent crude potentially reaching between $200 and $350 per barrel, according to various estimates. (The current price is approximately $77.)

XPBEE analysts believe the likelihood of such a scenario is extremely low at present. However, if even a partial realisation of this scenario occurs, it would trigger significant economic shocks, pushing some countries’ economies to the brink of disaster. A blockade of the Strait of Hormuz would not only raise oil prices but would also impact natural gas markets, as liquefied natural gas from Qatar is transported through the strait as well.