Gulf Tensions: Escalation in region could raise oil prices

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Oil prices spiked after the tanker attacks in the Gulf of Oman. As tensions grow, so is fear on the impact on the flow of petroleum to the global market. Adel El Mahrouky has more.

Trade volume of the Gulf Cooperation Council countries reached 1.4 trillion dollars.

All of their maritime trade go through the straits of Hormoz and Bab EL Mandeb.

The four tankers attacked during the last month were at these two vital areas.

It's why these Arab nations have panicked.

NAYEL AL JAWABRAH ECONOMIC ANALYST "One-fifth of the world's petroleum goes through Hormoz Strait. If it shuts down, oil prices will be phenomenal. They could easily surpass the 2008 prices which reached 148. That's in addition to the trade volume, who could cause price hikes for many other goods."

Oil prices have quickly settled after last week's attacks.

Yet fears of possible attacks on future oil tanks could make shipments cost more.

NAYEL AL JAWABRAH ECONOMIC ANALYST "Security fright will negatively affect the economy. There are talks that ships could put on the American flags so that an attack on it is an attack on America, which happened during the Iraq-Iran war in the 1980s. Some suggest a security ship accompany every vessel, which will significantly increase the coast and therefore prices."

It's tough to maintain balance in the tension with Iran.

Politically the GCC, USA and UK are escalating which could threaten global economy.

While the EU is a little more lenient, and that could give Tehran more political strength over its rivals.

ADEL EL MAHROUKY DUBAI, UAE "The dangers of the attack on the oil tankers is not only in the financial losses caused. It's more because of the threat they imposed on Bab el Mandeb Strait, the entrance of the Red Sea and the strait of Hormoz the gate to the GCC and both are the trade lifelines for the gulf. Adel EL Mahrouky, DUBAI, UAE."