How tensions in the Middle East could impact global shipping

Oil prices are on the rise amid attacks on ships in the Red Sea. Prices are at around $80 a barrel, which is far lower than prices were when Russia invaded Ukraine. Oil futures had then jumped to more than $100 a barrel.

The prices have remained low since June 2022. Prices spiked after the Oct. 7 attacks on Israel, but have since been declining.

"Oil prices have fallen since October 7th, and that seems counter-intuitive if you consider how much oil is produced in the nations adjacent to and nearby to Israel," Managing Director of Clearview Energy Partners Kevin Book said.

Israel is located near oil and gas giants — Saudi Arabia, Iraq and Iran. It is also surrounded by key oil trade routes.

"The market does not appear to believe there's going to be risks to regional transportation or production. The risks to production may be diminished because Saudi Arabia and Iran are currently getting along," Book said. "But the risks to transportation look very real. So the market may not be counting as much risk as there could be."

The Strait of Hormuz is often thought as the most important oil chokepoint. Nearly 1/5th of the oil the world consumes passes through the strait on a daily basis.

"People are particularly looking at Iran and Iran affiliated groups to see if this conflict will expand and will expand to that area in particular," American Exploration and Production Council CEO Anne Bradbury said. "That would certainly cause some much more significant supply disruptions in the global crude market than what we've seen thus far."