U.S. joins Iran-Israel war stoking worries about oil volatility
Oil prices increased by more than 7% on Friday and Israel has hit Iran, that it significantly increased tensions in the Middle East and caused concerns about corrupted oil resources.
Eli Hartman | Reuters
After entering the war between Iran and Israel, the oil markets enter a new stage of uncertainty and experts warn three -digit prices.
Investors closely monitor Iran’s reaction after the US strikes on its nuclear facilities and allocated “all options” to defend the sovereignty of the Iranian Foreign Minister.
Oil futures were over 2% from the early Asian hours. The US WTI Hound increased by more than 2% per barrel and rose to $ 75.22, while global comparison increased by 2% to $ 78.53 per barrel.
“The market has a risk of experiencing unprecedented supply outages in the coming weeks, a much more severe nature than the Battle of Oil Following the Battle of the Ukraine in 2022,” MST Marquee’s Senior Energy Analyst Saul Kavonic said. He said.
Although the market response to us is less aggressive, the industrial observers believe that, especially after a week when Israel launched air strikes against Iran, industrial observers have entered a new age of volatility, especially because they expect potential Iranian measures.
After confirming the closure of the Iranian Parliament according to the state media, the threats of blocking the Hormuz Strait contributed to market tremors.
Considering the dam of the missiles that have been fired for more than a week and the direct participation of the USA, this time it feels different this time.
Andy Lipow
Lipow Petroleum Assocates
The Bosphorus, which connects the Persian Bay to the Arab Sea, is a critical artery with approximately 20 million barrels of oil and oil products per day for global oil trade. This is almost one -fifth of global oil shipments.
If Iran closes the Hormuz Strait, the Western forces will probably “enter the struggle directly” and try to reopen, in a statement to Kavonic CNBC, the oil prices can approach 100 dollars per barrel and the closure progresses for more than a few weeks, he added that he can re -test the heights seen in 2022.
“Even a degree of transition from the throat, which is short of a complete closing, may see that oil prices have increased significantly.” He said.
Kavonic’s opinion is echoed by other industrial experts.
The United States and the Allied Army would eventually reopen the throat, but if Iran employed all military vehicles, Rapidan Energy Group President Bob McNallly said, “It may take longer than the last two Gulf war.” If Iran decides to attack the Gulf energy production or flows, it has the ability to disrupt oil and LNG transport, which causes a sharp increase in prices.
Authorized, “The key to the long -term closure or destruction of the Gulf Energy infrastructure can increase raw prices over 100 dollars,” he said.
Performance of oil criteria last year
. CBOE Crude oil volatility indexThey are the levels that the market hit in March 2022, which measures the expectation of 30 -day volatility in crude oil prices, shortly after Russia occupied Ukraine.
Although there is an uncertainty about how developments in the Middle East can play for oil materials, Lipow Associates’ Andy LiPow said that existing developments have a different weight.
“This time, considering the dam of the missiles that have been fired for more than a week and the direct participation of the USA,” he said, and said that he can add oil from the Hormuz Strait that he has to export.
Although the attempt to block the water path between Iran and Oman has deep consequences for a wider economy, the threats of blocking the throat were mostly rhetoric, experts say that it was physically impossible.
Vandana Hari, Founder and CEO of Vanda Insights, said, “So the picture is a bit confused and I think traders will be careful, not panic, unless there is a real evidence,” he said.
In 2018, Iran threatened to close the Hormuz Strait among the increasing tensions after the United States came out of the nuclear agreement and restored the sanctions. The similar threat was published in 2011 and 2012, when the senior Iranian authorities called the President Muhammad-Reza Rahimi. Alerted about a possible closing If Western countries impose more sanctions on oil exports on Iran’s nuclear activities.
In addition, it should be noted that CIBC Private Wealth Senior Energy Trader Rebecca Babin is not a target even with the latest conflicts so far.
“Apparently, both sides have at least the incentive to keep the oil away from the fire line for now.” He said.
