# Rising Oil Prices May Reduce Mining Profitability

Experts noted that U.S. and Israeli strikes on Iranian facilities have disrupted shipping through the Strait of Hormuz. About 20% of global oil supplies pass through this route, so any disruptions quickly impact global energy markets.

Against the backdrop of the conflict, Brent crude quotes rose from approximately $60 to more than $100 per barrel. However, the direct impact of oil prices on bitcoin mining production costs proved limited, since more than half of the network's computing power operates on alternative energy sources. In the industry's energy consumption structure, the share of fuel oil and diesel is minimal and practically does not affect mining economics.

The largest cryptocurrency mining centers remain the United States, Russia, and China. They are followed by Paraguay, UAE, Oman, Canada, Ethiopia, and Kazakhstan. In most of these countries, electricity is generated from gas, coal, or hydropower, so the connection between oil quotes and miners' costs remains weak, analysts noted.

Only a small portion of the network's hashrate is located in regions where electricity tariffs can actually depend on oil prices. In particular, the UAE and Oman account for about 6% of global hashrate. If we also account for Iran, Kuwait, Qatar, and Libya, the share of such regions could reach 8–10%.

Even in these countries, the impact of oil prices does not manifest immediately. Electricity tariff reviews occur with delays due to lengthy regulatory and contractual cycles, experts emphasized.

According to Luxor Technology analysts, a more serious threat to miners comes from the macroeconomic effect of rising oil prices. Higher energy costs strengthen inflation expectations and affect interest rate forecasts, which could prompt investors to reduce investments in risky assets.

As a result, pressure may arise primarily on the bitcoin price. A decline in cryptocurrency rates directly affects mining profitability, since companies' revenues are generated in BTC, while most operating expenses remain fixed.

Earlier, Neopool mining pool experts stated that by 2030, the five largest mining companies could control most of Bitcoin network capacity. Access to cheap electricity will become the key survival factor in the industry.