"US crude oil is on track to rise by 9% when trading resumes, according to data from the broker IG, after Tehran said on Saturday it had effectively closed the strait of Hormuz, a key oil chokepoint, reportedly prompting the halt of some oil shipments."
"About a fifth of global oil consumption passes through the strait of Hormuz, so a closure would disrupt shipments from Saudi Arabia, the United Arab Emirates, Iraq and Kuwait, as well as from Iran, leading to shortages and higher energy prices."
"It is our understanding that regional leaders warned Washington about the contagion risks of another confrontation with Iran and indicated that $100+ oil was a clear and present danger."
Oil prices are projected to surge significantly when markets reopen, with US crude expected to reach over $73 per barrel, a 9% increase from Friday's close. This spike follows Iran's closure of the Strait of Hormuz, a critical global oil chokepoint through which approximately one-fifth of worldwide oil consumption passes. The disruption threatens shipments from major producers including Saudi Arabia, UAE, Iraq, and Kuwait. Analysts warn oil could reach $80 per barrel with material supply disruptions, or exceed $100 in severe scenarios. Meanwhile, stock markets are expected to decline, with London's FTSE 100 projected to fall 0.5%. Investors are shifting toward safe-haven assets like gold and silver, which have risen significantly.
#oil-price-surge #strait-of-hormuz-closure #geopolitical-tension #energy-market-disruption #safe-haven-assets
Read at www.theguardian.com
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