Strait of Hormuz

Oil Prices Surge Amid Israel–Iran Strikes: What It Means for the Maldives

Rising Israel-Iran tensions have caused Brent crude prices to surge 7-11% since June 13, from $67-68 to mid-$70s per barrel. Analysts warn further escalation could push oil above $100, especially if the Strait of Hormuz is disrupted. For the Maldives, heavily dependent on imported fuel (fuel imports were $507 million in 2022, 20% of total imports), sustained high oil prices would widen the budget deficit and strain reserves. Short-term measures like subsidies are considered, but renewable energy transition is seen as a long-term solution. Markets price a 17% chance of a wider supply shock.