The oil market stays on edge with the battle between Israel and Iran coming into its sixth day, ING’s commodity consultants Ewa Manthey and Warren Patterson be aware.
Oil market fears the shutdown of the Strait of Hormuz
“Costs have rallied round 10% since Israel began its assault on Iran final week and are actually near a five-month excessive after US President Trump met along with his nationwide safety group on Tuesday to debate the escalating battle, sparking hypothesis that the US may very well be getting ready to affix the assault.”
“The most important concern for the oil market is the shutdown of the Strait of Hormuz. This might impression oil flows from the Persian Gulf. Nearly a 3rd of world seaborne oil commerce strikes via this chokepoint. A big disruption to those flows could be sufficient to push costs to $120/bbl.”
“OPEC’s spare capability wouldn’t assist the market on this case, as most of it’s situated within the Persian Gulf. Beneath this situation, we would want to see governments faucet into their strategic petroleum reserves, though this is able to solely be a short lived repair.”
