Escalating tensions threaten global oil supplies amidst US strikes on Iran

CONCERNS about international oil prices and global supply chains surged on Sunday following the United States' military strike on three major nuclear sites in Iran.

- SIPHELELE DLUDLA AND YOGASHEN PILLAY

This move, which has escalated ongoing tensions in the Middle East, comes less than two weeks after Iran and Israel reignited hostilities. Analysts on Sunday warned that the fallout from these attacks could have dire implications for the global economy.

In a recent televised address, US President Donald Trump described the airstrikes as a "spectacular military success," proclaiming that Iran’s key nuclear enrichment facilities-located in Fordow, Natanz, and Isfahan-have been "completely and totally obliterated.”

Of biggest concern now is that Iran is mulling the closure of the Strait of Hormuz, a narrow waterway at the mouth of the Persian Gulf controlled by Iran, which is now in the centre of global supply chain as it handles more than 26% of the world’s oil trade.

According to reports, there are currently close to 50 large oil tankers scrambling to leave the Strait of Hormuz.

Nigel Green, CEO of financial advisory giant de Vere Group, said a conflict that had remained largely contained was now threatening to trigger broad-based repricing across the global economy.

Green added that Brent crude had already been climbing steadily in recent weeks, but the decision to target Iranian nuclear facilities has dramatically increased fears of retaliation and disruption.