(TheRedWire.com) – Following the recent attacks by Hamas, a Palestinian militant group, against Israel, which has resulted in a way in the region breaking out, President Biden has been criticized over his decision to leave the Strategic Petroleum Reserve (SPR) at its lowest level in decades. The war has once again led to the price of oil rising.
Currently, the SPR includes 351.3 million oil barrels, bringing the reserve amount to its lowest levels since January 2021, when Biden took office.
The Brent crude index on Monday showed an increase in oil price by over 4 percent. The U.S. WTI index similarly exhibited this. According to these findings, the price of oil per barrel was now closer to $90 following the outbreak of the war in the Middle East. This could also mean that the global oil supplies might end up being temporarily held up.
Saul Kavonic, an energy analyst, recently stated during an interview with Reuters that around 3 percent of the global oil supply could be at risk if the conflict ends up reaching Iran. A larger regional war could also negatively impact oil transit through the Strait of Hormuz. He added that this could mean that around 20 percent of the oil supply globally could end up being held hostage.
Citibank analysts also pointed out that timing was very important and that if the attacks were to reduce the possibility of Saudi Arabia dropping its oil production by an extra 1 million barrels each day.
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