The Islamic Revolutionary Guard Corps has taken control of the Strait of Hormuz, which is a key route for global oil supplies.
According to FT, Saudi Arabia, the UAE, Iraq, and Kuwait may cut production volumes or completely shut down their fields, fearing storage facilities may overflow due to the accumulation of oil in the Persian Gulf.
Further attacks on oil fields and energy infrastructure create new risks that could lead to a sharp increase in oil prices, as the article points out.
It is worth noting that Kuwait has already begun to reduce production at some of its fields. The main reason for this step is the overflowing storage facilities due to difficulties in exporting hydrocarbons amid the escalating conflict in the Middle East.
The Strait of Hormuz is an important transport corridor through which about 20% of the world's oil and up to 30% of liquefied natural gas from Persian Gulf countries such as Iraq, Saudi Arabia, Kuwait, Bahrain, Qatar, and the UAE pass to Asian markets.
Experts warn of a potential sharp rise in energy prices if the blockade of this transport corridor continues.
