Joseph Majkut, Kevin Book
The sudden eruption of war in the Mideast Gulf has created dramatic new risks for global energy security. Iranian attacks have damaged oil and gas facilities in the Gulf region, and threats against shipping though the Strait of Hormuz have brought maritime traffic to a near standstill, halting oil and liquified natural gas (LNG) exports. As the crisis continues, announcements of closing production fields and LNG export facilities are beginning to mount. On Friday, March 6, international Brent oil prices surpassed $92 per barrel, up 28 percent since last Friday’s market close. Prolonged disruptions to shipping and/or significant damage to export facilities could cause lasting and larger price increases.
This week, President Donald Trump announced several measures to reduce potential energy price shocks. He said that the United States would guarantee shipping through the strait using both naval escorts and insurance products backed by the U.S. International Development Finance Corporation, and that it would loosen energy sanctions on Russian oil imports into India.
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