"While the military attacks are themselves supportive for oil prices, the key factor here is the closing of the Strait of Hormuz. We expect prices to open much closer to $100 US a barrel and perhaps exceed that level if we see a prolonged outage of the Strait."
"More than 20 per cent of global oil is moved through the Strait of Hormuz. Most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz after Tehran warned ships against moving through the waterway."
"The net impact from its closure would be a loss of 8 million to 10 million bpd of crude oil supply even after diverting some flows through Saudi Arabia's East-West pipeline and Abu Dhabi's pipeline. Rystad expects prices to rise by $20 to about $92 US a barrel."
Brent crude oil jumped 10% to approximately $80 per barrel following U.S. and Israeli military strikes on Iran. Analysts predict prices could climb to $100 or higher if the Strait of Hormuz closes, a critical chokepoint through which over 20% of global oil passes. Tanker owners, oil majors, and trading houses have suspended shipments through the strait after Tehran warned against transit. A prolonged closure could eliminate 8-10 million barrels per day of supply even with alternative pipeline routes. OPEC+ approved a modest 206,000 barrel per day output increase from April. Various analysts project prices between $90-$100+ depending on the duration of any strait disruption.
Read at www.cbc.ca
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