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The Middle East conflict highlights how much global energy has changed in recent years

remon Buul by remon Buul
June 25, 2025
in Business
0
The Middle East conflict highlights how much global energy has changed in recent years

Washington (AP) – Iran launched missiles on Monday in an American military base in Qatar, threatening to put a wider conflict in the Middle East, a region that provides around a third of the oil used in the world each year. The same day, the reference crude degraded us more than 7%, one of the largest sales of a day this year. The next day, the same thing has happened, which reduces the two -digit crude prices this week.

The apparently illogical fall in energy prices has highlighted a new global reality: the world is flooded with oil.

Fuel prices have barely evolved this week, but experts say that motorists will probably see prices at the pump start to drop, perhaps this weekend.

With the situation in the Middle East still volatile, Iran could try to block the Hormuz Strait Off its coast, through which 20% of world oil passes daily. Although little expect Iran to do this because it would paralyze the ability to move its own oil, the fact remains that there have been drastic changes during the 50 years that a Arab oil embargo has hampered the US economy and has sent arrow energy prices.

Here is a quick overview of new forces on supply and demand that reshaped the global energy landscape, and what you can expect to see with regard to the pump prices this weekend.

Pump price

Technical innovation over the past two decades has overturned world energy markets and made the United States the best world oil producer, even exceeding Saudi Arabia in 2018. It has contributed to an excess of prolonged oil, and this has constantly dropping prices.

Gas prices have been down wide for about three years. This remained true even during traditional periods of high demand, such as the season of summer travel which launches at high speed.

Part of the reason, according to Patrick de Haan, chief of oil analysis of Gasbuddy, is that the United States has announced aggressive prices against its business partners towards the year when American gas prices are generally beginning to increase. This has removed demand for households and businesses, due to the anticipation of the economic benefits of a broader trade war.

And prices are likely to start down and quickly. The service stations bought their fuel supply before crude prices collapsed this week, so motorists have not seen the prices of gas decrease due to a typical lag between oil and petrol prices.

“I think the national average will probably stop increasing over the next 24 to 48 hours,” Patrick de Haan, head of oil analysis of Gasbuddy said on Tuesday. “Then it should stabilize for a day or two, then we should start to see the prices – at least the national average – to start lowering this weekend.”

On Wednesday, the average retail price of a gallon of gas in the United States was $ 3.23, compared to $ 3.47 a year ago. In June 2022, the average price of the United States for a gallon of gas overshadowed $ 5, a summit of all time, according to the Auto Club AAA.

Offer and request

The United States produces record volumes of natural gas and gross. Production has reached so high levels that energy companies close drilling operations, because it is pulling gross from the soil with so low prices has no financial meaning.

The chances that an American oil company takes action after President Donald Trump implored them in a publication on social networks to “drill, baby, forest”, is slim.

The American drilling activity began to slow down last year and the number of active oil and gas platforms in the United States dropped last week at 554, the lowest level since November 2021. It is a drop of about 19% compared to a year ago at that time.

This could lead to a clear supply and higher prices without producers outside the United States which is currently stimulating production. The type of drilling operations carried out outside the United States can be less agile and more difficult to extinguish, and income requires much more.

OPEC + Alliance of Oil producing countries this month announced this month, it increased production. This week, S&P Global Commodity Insights increased its production forecasts to 10 years for Canadian bituminous sands, expecting production to reach record levels this year.

However, these supply forces collide with the reality of the weakening of global oil demand.

According to the International Energy Agency, the share of oil demand for global energy in 2024 fell for the first time for the first time. The overall demand for energy has increased, but even more for natural gas and other energy sources, said the IAI in its latest annual report published in March.

Oil demand increased 0.8% last year, according to the IAI.

Part of the reason is new technology in transport.

Global sales of electric cars climbed 25% last year, according to the IEA, just the most recent example of the integration of electric vehicles. One of the five vehicles sold last year was electric. This is one of the reasons why crude demand decreases, while demand for alternative energy forms continues to increase. In addition, fossil fuel engines are becoming more and more effective, whether they move in the air, by sea or on the road.

And at the moment, the same anxiety that has led households to reduce travel in the car also has an impact on airlines, which have reduced their projections for plane trips this year due to potential commercial wars and the economic discomfort that accompanies them. This added an additional drop pressure on oil prices.

Alternative energy rise

The new energy technology goes of course beyond transport.

According to the IAI, 80% of the increase in global electricity production last year was provided by renewable sources such as wind and solar energy.

As more alternative energy sources are established, including natural gas, demand for raw falls. Natural gas demand increased by 2.7% in 2024, while oil demand increased by only 0.8%, against an increase of 1.9% in 2023.

Large American technological companies have started to invest massively in nuclear energy to meet their energy needs for artificial intelligence and data centers.

Facebook parent company Meta,, Microsoft,, Amazon and Google have all announced investments and partnerships with nuclear energy companies in the past year.

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