Any kind of disruption to oil markets, even abroad, impacts prices in the U.S. Experts say it’ll be felt in sectors like transportation, pharmaceuticals, travel and food, Mariah Rush reports for the Chicago Sun-Times.
Iran has closed the Strait of Hormuz, the narrow mouth of the Persian Gulf through which 20% of the world’s oil supply passes. It’s the largest disruption the oil industry has ever faced, according to Sam Ori, executive director of the University of Chicago’s Institute for Climate and Sustainable Growth.
“There’s never been anything in the history of the oil market that really is at the same scale as this. You’re talking about a fifth of the world’s oil supplies being disrupted,” Ori said. “There are some alternative routes, but in the best case, you’re still talking about a supply disruption of 10 [million] to 15 million barrels a day.”
Seventy percent of the oil consumed daily in the U.S. is in the transportation sector, according to Ori. A spike in transportation fuel, like diesel, acts as a hidden tax on deliveries.