Petrol, Diesel Prices May Rise as Hormuz Route Faces Disruption

Recent reports of attacks on two ships transiting this route have further heightened concerns. According to experts, if traffic is restricted in this waterway, the export capacity of many countries will be affected, leading to a rise in global petrol and diesel prices.

In an effort to provide relief amid the tensions, eight countries in the OPEC+ group have announced increased crude oil production. An additional 206,000 barrels per day will be produced from April. Countries increasing production include Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman. However, energy analysts say that simply increasing production will not be enough unless export routes are fully secured.

Iran exports approximately 1.6 million barrels of oil per day, a large portion of which goes to China. If exports are disrupted, major importing countries like China may be forced to seek alternative sources, potentially disrupting the global demand-supply balance. Energy experts believe that the impact of this West Asia oil supply crisis will not be limited to the oil market alone, but could also impact the global economy, inflation, and stock markets.