Volatility in global oil markets is rippling into Alaska’s economy as North Slope crude prices react to mounting tensions between Israel and Iran.
In early trading for the week starting June 15, Brent crude oil surged to $74.23 per barrel, a 7.02% increase from the day before. West Texas Intermediate crude followed suit, rising 7.26% to $72.98 per barrel. These price jumps come right after Israeli airstrikes targeting Iranian nuclear sites, which spooked global markets and raised fears of a wider regional conflict.
North Slope oil prices typically track closely with Brent and WTI benchmarks, which puts Alaska’s oil-dependent revenue stream at the mercy of global fluctuations. Some analysts speculate Brent prices could breach $80 if threats to the Strait of Hormuz escalate.
The Strait of Hormuz is a vital chokepoint through which about a fifth of the world’s oil flows, has emerged as a flashpoint. Any disruption there would likely drive up prices further, benefitting Alaska’s oil revenue in the short term. On Saturday, a member of the Iranian parliament said closing the Strait of Hormuz was “under serious consideration” in response to Israeli attacks on Iranian military and nuclear infrastructure, according to Al Jazeera news source.
Iran has a history of seizing or harassing commercial vessels in or near the Strait. In April 2024, the IRGC seized a container ship linked to Israel near the Strait, amid tensions following Israeli strikes on Iran’s consulate in Damascus.
Meanwhile, OPEC+ had already decided to boost production by 411,000 barrels per day in June, as part of a gradual unwinding of 2.2 million barrels per day in voluntary cuts that are set to phase out by September 2026. The group will reconvene on July 1 to decide August production levels, a meeting now carrying heightened significance in light of recent geopolitical developments.
While increased production levels could dampen price spikes, they also raise the risk of oversupply if the global economy slows or if demand softens. The US Energy Information Administration’s forecast of $65–$66 per barrel for 2025, with Brent crude oil price falling to about $59 per barrel in 2026. That forecast was made before the fighting started again between Israel and Iran.
Even a $10 per barrel swing in oil prices can significantly impact state revenue in Alaska, which can benefit or suffer from the vagaries of the commodity market.
