Oil prices soar amid Strait of Hormuz fears as Iran war intensifies
Oil prices rose as the US and Israel continued their attacks on Iran on Sunday night.
Brent crude oil Prices hit a new 52-week high on Monday, rising 9.3% to $79.40. West Texas Intermediate prices also rose more than 9% to $73.10.
US President Donald Trump said that the “overwhelming military attack” he called Operation Epic Fury will continue until US goals are achieved. Israel launched new attacks on both Iran and Hezbollah targets in Lebanon late Sunday, after Iran attacked military and infrastructure targets in various countries in the region.
Brent crude oil.
As the United States continues to target Iran’s air defenses and naval capabilities, global oil supplies have also come into sharp focus.
Amrita Sen, founder and director of research at Energy Aspects, told CNBC on Monday that she expects oil prices to likely remain around $80 for a while.
Sen said it was unlikely that the Strait of Hormuz, through which 13-15 million barrels or 20 percent of global oil supply passes, would be completely closed. He added that the greater risk comes from one-off attacks on ships passing through the area.
Sen said the United States and Israel have superior military power that would ultimately neutralize Iran’s ability to completely close the Bosphorus, a key shipping channel for oil producers such as Saudi Arabia, the UAE, Iraq, Iran and Kuwait.
However, single attacks on ships are more difficult to prevent. “This is something we have been warning our customers about from the beginning,” he said.
WTI.
He added that shippers are now extremely careful about entering tankers after three tankers were hit over the weekend.
“That’s the big issue right now – how do Asian refiners get volumes from the Middle East?” You added.
He stated that Oman and some UAE networks could bypass the Bosphorus, while Saudi Arabia plans to transport its oil via the East-West pipeline across the Red Sea.
“But even if you can move 5 million out through other methods, about 10 million are still stuck,” he added.
Sen added that if the energy infrastructure is hit, the price of oil could rise to $100.
He added that “the risk is very high” when it comes to potential attacks on infrastructure.
