Trump’s global oil crisis now the biggest in history: report

The global oil supply disruption brought on by Donald Trump's war against Iran is now the biggest crisis of its kind in history, according to a new report from CNBC, and it shows no signs of stopping anytime soon.

In the immediate aftermath of the U.S. and Israel's joint military strikes against the Middle Eastern nation last weekend, Iran ordered the closure of the Strait of Hormuz, a body of water that connects the Persian Gulf to the Arabian Sea, through which nearly all of the Gulf States' crude oil is shipped to the rest of the world. This closure effectively halted shipments of around 20 percent of the world's oil supply and set gas prices skyrocketing at a time when consumers are still feeling the sting of inflation.

According to a new report from the Associated Press, the price of a barrel of crude oil peaked at nearly $120 as of Monday morning, before dipping back down to around $101, which still represents a spike of over 20 percent since the start of military operations in Iran. These soaring oil prices have had a disastrous impact on the broader global economy, with stock prices tumbling all over the world on Monday morning.

Citing a new report on the crisis from Rapidan Energy, CNBC on Monday reported that Trump's disruption of the global oil supply was now by far the worst in history. With 20 percent of the world's oil supply impacted, the current circumstances have more than doubled the impact of the Suez Canal crisis of 1956, after Britain, France and Israel invaded Egypt’s Sinai Peninsula, which stifled roughly 10 percent of the supply. The report also noted that the current crisis is nearly three times as bad as the Arab oil embargo of 1973, which resulted in historically crippling oil shortages the world over.

What makes the Hormuz closure so much worse than past crises, according to Rapidan's report, is that now, there are far fewer spare reserves of petroleum to work with. Saudi Arabia and the United Arab Emirates hold most of the world's "swing capacity" of oil, according to CNBC, and they are two of the nations impacted by the current closure.

“The conflict has not only taken offline a historically high share of global supply – it has simultaneously disrupted the primary holders of spare capacity,” Rapidan's report explained. “The result is a market with no meaningful cushion. There is no swing producer positioned to step in.”

The Trump administration has reportedly floated the prospect of dipping into the Strategic Petroleum Reserve to bring prices down, though experts note that this supply is not nearly enough to offset the disruption caused by the closure of Hormuz.

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