Strait of Hormuz is in focus as Israel-Hamas war threatens to spread
Tankers depicted in the Strait of Hormuz — a strategically important waterway which separates Iran, Oman and the United Arab Emirates.
ATTA KENARE | AFP | Getty Images
It’s been nearly four weeks since Israel declared war on Palestinian militant group Hamas, and as the conflict in Gaza enters the second stage, concerns of a spillover into the wider Middle East region is also mounting.
Market observers are keeping a close eye on the the Strait of Hormuz — the world’s most important oil transit chokepoint, to see if there may be any potential impact.
The strait, which sits between Oman and Iran, is a vital channel where about one fifth of global oil production flow daily, according to the Energy Information Administration. It is a strategically important waterway linking crude producers in the Middle East with key markets across the world.
On Oct. 7, Hamas militants launched a multi-pronged attack by land, sea and air and infiltrated Israel, killing more than 1,400 people. In retaliation, Israel launched air strikes and a ground invasion into the Gaza Strip, which has so far killed more than 9,000 people in the enclave.
Risks of it spiraling into a wider conflict remain. The U.S. has deployed military assets to the region to support Israel which is fending off rocket volleys from Iran-backed militants in neighboring Lebanon and Syria.
The U.S. has also carried out airstrikes against targets linked to Iran’s Revolutionary Guard Corps in Syria.
A retaliation from Israel against Iran risks a closure of the strait, pushing oil prices to above $250 a barrel, a recent Bank of America note predicted. Iran is a major oil producer, and its proxies include Hamas and the Hezbollah, militant organizations that are respectively based in Gaza and Lebanon and have stated aims to destroy Israel.
Observers worry that Israel’s intense bombardment of the Gaza Strip will incite more of its adversaries to attack from new fronts, risking a spill over into the wider Middle East region.
However, some industry watchers say that a closure is unlikely.
“The probability of a supply disruption, especially the shutdown of the Strait of Hormuz, is of a low probability,” said Andy Lipow, president of Lipow Oil Associates. He said oil producers like Saudi Arabia, Iran, Iraq and Kuwait are still reliant on the revenue that comes with access to the strait.
Goldman Sachs echoed the same sentiment.
Analysts led by head of oil research Daan Struyven said in an Oct. 26 note that a “severe supply downside scenario” as a result of an interruption of trade through the Strait of Hormuz is not likely to materialize.
On Sunday, Iranian President Ebrahim Raisi said on social media platform X, formerly known as Twitter, that Israel had “crossed the red lines, which may force everyone to take action.”
Foreign ministers of Arab nations — including the United Arab Emirates, Jordan, Bahrain, Qatar, Kuwait, Saudi Arabia, Oman, Egypt and Morocco — condemned the targeting of civilians and violations of international law in Gaza by Israeli forces. Israel says it does not target civilians, only terrorist targets.
In 2019, Iran repeatedly threatened to disrupt oil shipments going through the Strait of Hormuz after former U.S. President Donald Trump withdrew from the landmark 2015 nuclear deal and restore sanctions on the Islamic country. In the past two years alone, Iran has attacked or interfered with 15 internationally flagged merchant vessels, according to data from the U.S. Navy.
On Monday, the World Bank projected that oil prices could surge to $157 per barrel should the ongoing conflict continues to escalate.
The World Bank warned of a repeat of the Arab oil embargo in 1973, where Arab energy ministers imposed an embargo on oil exports on the U.S. in retaliation for its support of Israel in the 1973 Arab-Israeli war.
In such a scenario, there could be a “large disruption” scenario, “that would drive prices up by 56% to 75% initially — to between $140 and $157 a barrel,” the report said.
Lipow said it’s not likely for such a scenario to take place.
Oil prices year-to-date
“Times are quite different today than they were 50 years ago, because you have these Mideast countries that simply need the [oil] revenue,” he said.
That said, Lipow pointed out that Iran has been “prosecuting the war through its proxies.”
“One of my fears is that maybe one of these proxies makes a very bad mistake when they’re attacking Israel,” he added. Should that happen, the analyst said Israel will likely retaliate, going “right for Iran’s jugular” which would deteriorate very quickly into a regional conflict.
Germany is about to become home to Europe’s largest battery storage system – a massive 1 gigawatt (GW) / 4 gigawatt-hour (GWh) project in Jänschwalde, Brandenburg.
LEAG Clean Power GmbH and Fluence Energy GmbH, a subsidiary of US-based Fluence Energy (NASDAQ: FLNC), are teaming up to build the “GigaBattery Jänschwalde 1000.” The four-hour system will use Fluence’s Smartstack technology, its latest large-scale energy storage solution.
Once complete, Europe’s largest battery storage project will play a key role in stabilizing Germany’s grid and storing renewable power for when the sun isn’t shining and the wind isn’t blowing. It’s designed to deliver essential grid services, support energy trading, and boost energy security as the country phases out fossil fuels.
LEAG’s broader “GigawattFactory” plan combines solar and wind farms with flexible power plants and large-scale batteries across Germany’s Lusatian energy region. “By constructing gigascale storage facilities, we’re addressing one of the biggest challenges of the energy transition: ensuring constant power regardless of the availability of renewable energies,” said Adi Roesch, CEO of the LEAG Group.
Fluence CEO Julian Nebreda described the project as a “milestone for the energy future of Germany and Europe,” adding that it demonstrates how collaboration and cutting-edge technology can “transform the foundation of our economy and our everyday lives.”
The German government recently reaffirmed the importance of storage in building a secure and affordable clean power system. With this 4 GWh giant, LEAG and Fluence are implementing that priority in one of Europe’s most coal-heavy regions.
Read more: Battery boom: 5.6 GW of US energy storage added in Q2
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![The Genesis GV90 is shaping up to be a real stunner [Video]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2024/11/Genesis-GV90-ultra-luxury-SUV.jpeg?resize=1200,628&quality=82&strip=all&ssl=1)
The GV90 will be the brand’s largest, most luxurious SUV yet. With its official debut coming up, a production version of the Genesis GV90 was spotted in public for the first time, offering a closer look at the stunning SUV.
The Genesis GV90 is a stunning flagship SUV
Genesis vehicles already have a unique design that’s hard to miss. The big Creste Grille, Two-Line Quad Lamps, and smooth character lines offer a refined, luxurious look, but Genesis is planning to take it to the next level with the GV90.
The GV90 is an “ultra-luxe, state-of-the-art SUV,” according to Genesis. It will be the luxury brand’s new flagship vehicle and first full-size electric SUV.
We got our first look at the flagship SUV last March after Genesis unveiled the Neolun concept at the New York Auto Show.
The GV90 has been spotted out in public several times now, even flashing high-end features like coach doors and adaptive air suspension, but now, we are finally getting our first look at the production version in real life.
A new video from HealerTV shows the production version of the Genesis GV90 in action. Although it’s still covered in camo, you can see a few slight design changes from the concept shown last year.
The headlights and grille appear closer in design to its current vehicles, but other than that, the GV90 looks essentially the same up front as the Neolun concept.
Since it’s still covered, it’s hard to see where the headlights are connected at this point. From the side and rear, the GV90 looks identical to the concept.
Genesis has yet to announce an official launch date, but the GV90 could debut by the end of the year with sales expected to kick off in mid-2026.
The flagship SUV is rumoured to be the first vehicle to debut on Hyundai’s new eM platform, which it claims will “provide 50% improvement in driving range” compared to its current EVs. It will also serve as a tech beacon, featuring Hyundai’s most advanced connectivity and safety tech.
We will learn official prices and final specs soon, but one thing is for sure: it won’t be cheap. The Genesis GV90 is expected to start at around $100,000, but higher trims could cost significantly more with added features and options.
Genesis is also introducing its first hybrid, the GV80, next year, followed by its first extended-range electric vehicle (EREV) based on the GV70. The EREV is expected to launch in late 2026 or early 2027. There’s also an off-road SUV in the works, which will likely arrive as a 2027 model.
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