Oil prices went up on Monday after former US President Donald Trump and Iran’s leaders exchanged threats over the Strait of Hormuz.
This waterway is very important because one-fifth of the world’s oil passes through it.
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Trump gave Iran 48 hours to reopen the strait for ships. If Iran did not, he said the US would destroy Iran’s energy buildings.
Iran warned that if the US attacked, it would close the strait completely and destroy important buildings in the region.
Israel also said the fighting in the Middle East could continue for several more weeks.
Because of these tensions, oil prices jumped more than two percent. Brent crude oil traded above $114 per barrel before dropping to $109.34. Other oil prices also showed big changes.
The head of the International Energy Agency said the world is facing a major energy crisis. He said no country would be safe from the effects if the situation continues.
He added that the world is losing more oil now than during the oil crises of the 1970s.
Experts also warned that rising oil prices could cause inflation to increase. This might force central banks to raise interest rates.
There are also concerns about global food security because fertilizer shipments have been stopped.