Oil Prices Surge as Multiple Countries Activate Response Measures; Middle Eastern Nations Open New Trade Routes to Bypass Hormuz

People’s Financial News, March 15 — The military conflict between Israel and Iran has now lasted over two weeks, and its impact has spread to the daily lives of people in Europe and the United States. European Commission President von der Leyen recently stated that in the first 10 days of the conflict, European taxpayers spent an extra 3 billion euros on imported energy. In response to soaring oil prices, many Western countries have launched various measures. Member countries of the International Energy Agency (IEA), including the UK, Germany, and Austria, have announced they will cooperate with the IEA’s plan to release 400 million barrels from strategic oil reserves. On the 12th, the U.S. Department of the Treasury announced a temporary relaxation of some sanctions on Russian oil, allowing transactions such as sales, deliveries, and unloading of 124 million barrels of Russian crude oil or petroleum products already shipped. Meanwhile, several Middle Eastern oil-producing countries have recently taken actions to replace the closed Strait of Hormuz. Saudi Arabia announced the launch of an “Integrated Logistics Corridor” plan this week, while the UAE diverted cargo to the ports of Fujeirah and Hurfakkan along the Oman Gulf coast. Dubai Global Port Group also permitted bonded road transport to Jebel Ali Port for final clearance. However, the capacity of these emergency measures still falls far short of compensating for the massive losses caused by the closure of the Strait of Hormuz. As ING Bank strategist in the Netherlands pointed out, “As long as oil tankers cannot pass safely through the Strait of Hormuz, the historic high of oil prices is still ahead.” (CCTV Finance)