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Petroleum prices rose to a maximum of five months after the United States bombarded Iran’s nuclear facilities, increasing the probability that Tehran responds by attacking the energy infrastructure in the region or sending in the Hortuz Strait.
Brent Crude, the international point of reference, rose to 5.7 percent after the market opened Sunday night, but then reduced its profits to approximately 3 percent to operate at $ 79 per barrel. The American marker West Texas Intermediate increased by a margin similar to $ 76.83.
Other movements in the price of oil this week will depend on how the Islamic Republic or its representatives, such as Houthis, choose to take reprisals, analysts said.
“A clear red line has been crossed,” said Jorge León, head of geopolitical analysis of the Rystad Energy Consulting, noting that the weekend bombardment marked the first time that the United States directly attacked the Iranian territory.
“In an extreme scenario in which Iran responds with direct strikes or is aimed at regional oil infrastructure, oil prices will increase sharply,” he said. “Even in the absence of immediate reprisals, markets are likely to have a price in a higher geopolitical risk premium.”
Oil prices have already increased around 14 percent since Israel launched its first surprise attack against Iran 10 days ago. It is likely that the highest prices of oil are stirred to other energy markets, such as gasoline, something that could cause a new explosion of inflation worldwide.
The entrance of the USA has introduced “a new layer of volatility in energy markets”, leaving merchants waiting for the “next Tehran movement,” Leon said.
The president of the United States, Donald Trump, said they will go from additional attacks if Tehran does not “make peace”, but the Islamic Republic had previously committed to retaliation if the United States became involved. The uncompromising in Iran have already requested action on Sunday, with the influential editor of the Kayhan newspaper demanding that the country attack the naval fleet of the United States in the Gulf and stop western ships that move through the Hormuz Strait.
Around a third of maritime oil supplies in the world pass daily through the narrow river route that separates Iran from the Gulf States, and any attacks against sending in the Strait immediately would make energy prices fire, analysts said.
Iran has previously threatened to close the Strait, although analysts believe that it will have difficulty blocking the river route due to the presence of the fifth Fleet of the US Navy. Uu. In Bahrein.
“Security officials argue that it would be difficult to completely close the hormuk strait for a prolonged period,” said Helima Croft, former CIA analyst who is now in RBC Capital Markets. “That said, multiple security experts argue that Iran has the ability to hit the tankers and key ports with missiles and mines,” he said.
Iran also uses the river route to send its oil to China and other importers.
An alternative response could see Iran attack oil fields and infrastructure in American allies in the region, such as Saudi Arabia and Qatar. Anxious to be attracted to the conflict, the Gulf countries have repeatedly requested the end of hostilities and a return to dialogue.
In a statement on Sunday morning, the Doha Ministry of Foreign Affairs warned that “dangerous tension” in the region could have “catastrophic repercussions.” Saudi Arabia said I was following the developments in Iran with “great concern.”
Global Commodity Insights S&P analysts said the manifestation in oil prices could be relieved on Monday morning if there was no immediate Iranian response.
“The key question is what comes next,” said James Bambino and Richard Joswick from S&P. “Will the interests of the United States be attacked directly or through allied militias? Will Iranian crude oil exports be suspended?
Even if Iranian crude oil exports are interrupted, the increase in the production of the OPEC+ poster and current global inventories mean that the oil market will remain sufficient, as long as the hormuk narrow remains open, they added.
Iran exports approximately 2 million barrels of oil per day, while around 21 mn of barrels of Iran, Iraq, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates pass daily through the Hormuz narrow.
Analysts said that the longest geopolitical tensions in the Middle East remain high, the greater the risk of a prolonged period of high oil prices, which would raise inflation and global economic growth.
“The Trump administration is probably difficult to balance Iran’s nuclear ambitions while avoiding a prolonged increase in crude oil prices, in turn, raising inflation and weakening the economy of the United States,” said Michael Alfaro, director of investments at Gallo Partners, a coverage fund focused on energy and industrialists.
