Global oil markets experienced a significant surge in prices during the second week of October 2024, driven primarily by rising tensions in the Middle East. Oil benchmarks Brent crude and West Texas Intermediate (WTI) rose more than 3% midweek, with Brent crude reaching $75.98 per barrel and WTI climbing to $72.30. The surge followed escalating fears of a broader conflict after Iran carried out aggressive military actions on October 1, which prompted immediate concerns about potential disruptions to global oil supplies.
One of the major sources of apprehension remains the Strait of Hormuz, a critical chokepoint through which nearly a third of global seaborne oil passes. Traders and analysts increased their geopolitical risk assessments, factoring in the possibility of restricted oil transport through the region should tensions further intensify. Despite these fears, the Organization of the Petroleum Exporting Countries and allies (OPEC+) opted not to alter current production levels, contributing to heightened market uncertainty.
Concurrently, Cuba faced an escalating energy crisis, highlighting the broader challenges faced by vulnerable power infrastructures in developing countries. On October 5, intermittent blackouts began affecting roughly a third of the island. The situation deteriorated further, culminating in a full nationwide blackout by October 18. This collapse was attributed to the failure of a key thermoelectric plant, compounded by long-standing fuel shortages.
Cuba’s energy grid has struggled for years due to aging infrastructure, inefficient power plants, and limited access to imported fuel. The October crisis placed additional pressure on Cuban citizens already dealing with economic hardship and frequent power rationing. The blackout not only disrupted daily life but also had far-reaching effects on public health, education, and local industries.
The juxtaposition of these two crises underscored the fragility of global energy stability. While the Middle East developments stoked fears of supply cuts and prompted a speculative rally in oil futures, the Cuban blackout spotlighted how existing energy vulnerabilities can turn into full-blown humanitarian issues. Together, these events served as a stark reminder of the intertwined nature of energy markets, geopolitics, and infrastructure resilience.
As the world continues to grapple with energy security concerns, these developments are likely to fuel further volatility in oil prices and pressure governments to reconsider their energy strategies. Policymakers and investors alike will need to remain vigilant as both geopolitical tensions and climate-related energy disruptions persist.
