Why Oil Prices Look Set to Skyrocket (Level 1)

The war between the United States and Iran has started again. Both sides have stopped talks. Iran closed the Strait of Hormuz, a key path for oil. Oil prices rose a bit, but a bigger jump may come. First, the world's oil storages are very low. Last time, countries used most of their saved oil to keep prices down. Now there is little left. Second, many traders bought insurance last time because they thought President Trump would stop the war quickly. Now the war has restarted, so that hope is gone. Traders may now rush to buy oil, pushing prices up fast. Third, the Ukraine war is also hurting fuel supplies. Ukraine has attacked Russian oil sites, and Russia has stopped selling some fuel to other countries. All this means a sudden oil price spike is now more likely.