Oil markets are spooked as Iran-Israel tensions escalate | Oil and Gas News

Israel strike on military and nuclear sitesAnd Iran’s reprisalshave already shaken world supply chains.

While airlines suspend thefts to Tel Aviv, Tehran and other airports in the region, oil companies, maritime companies and regulatory agencies rush to increasing concerns that the main commercial routes like the Hormuz Strait could be taken in cross -fires.

Merchant navigation always goes through the Hormuz Strait, but with increased caution. Iran previously threatened to close this critical trade route in response to Western pressure. Even the suggestion of such a decision has already sent shock waves through the world markets, and the price of oil has increased.

The last rhetoric of American president Donald Trump did not do much to alleviate these concerns. He warned that if Iran did not do it “conclude an agreement“, There could be more” death and destruction “.

“If the United States is perceived as involved in attacks, the risk of climbing increases considerably,” said Jakob Larsen, head of security and security of the Bimco shipping association, at the Reuters news agency.

Oil prices increase

At 4:00 p.m. in New York (8:00 p.m. GMT), the prices of the Brent crude, which are considered the international standard, are 5% higher than the closure of the market of yesterday.

Oil term contracts have increased by more than 13% at a given time, reaching their highest levels since January.

Any closure of the Hormuz Strait, a strategic trade route between the Persian Gulf and the Gulf of Oman, by which 20 percent of the world Global oil production is moving, which would probably increase oil prices more. This could intensify inflationary pressures worldwide, and in particular in the United States.

The sharp increase in prices comes a report from the consumer price index more than expected in the United States earlier this week, which has shown that prices increased by 0.1% for the month. Energy costs are a key inflation driver. Fuel prices, in fact, fell 2.6% during the period. The feeling of consumers also jumped for the first time in six months while features were relaxed. However, the new conflict could interrupt the relief that American consumers had expressed, according to JPMorgan Chase analysts.

Wait -and -see

“Energy priced gains may have a disastrous impact on inflation, reversing the trend of consumer price cooling in the United States,” said Raw Material Researchers for JPMorgan Chase in a note published on the strike heels. “We continue to believe that all the political policies that could increase oil and inflation would probably give in to Trump’s main objective to maintain low energy prices – a campaign promise,” analysts Natasha Kaneva wrote, Prateek Kedia and Lyuba Savinova.

The markets have dropped more broadly to the news. The S&P 500 fell by 1.1%, the industrial average of Dow Jones is down 1.7 and the NASDAQ is 1.3% lower.

“Today, as you can see in the markets, whether it is S&P, whether it be Bitcoin, things have been a bit stable or flat. So there is a small waiting approach. Taufiq Rahim, an independent geopolitical strategist and director of the 2040 notice, told Al Jazeera.

If the expedition by the critical sea route had been suspended, even temporarily, the International Energy Agency said it was well supplied to Release the emergency reservesif necessary. However, this involves the risk of exhaustion.

There are 1.2 billion barrels in its strategic reserves. The world uses approximately 100 million barrels of oil per day.

“If this reaches the level of closure of the Hormuz Strait, well, now it will be the biggest oil shock of all time,” Mattken Mattken, geopolitical and main vice-president of BCA Research, a macroeconomic research firm.

OPEC Secretary General Haitham Al-Ghais criticized the AIE for his statement that he could publish strategic reserves, saying that she “raises false alarms and projects a feeling of fear of the market by repeating the useless need to potentially use petroleum emergency stocks”.

This comes in the midst of increased pressure for the group of nations producing oil to increase production. Earlier this month, OPEC + members agreed to increase the production of 411,000 barrels for the month of July.

The Hormuz Strait remains open yet. Countries, including Greece and the United Kingdom, advised ships to avoid the Gulf of Aden, the body of water between Yemen and Somalia which connects to navigable waterways close to Israel and to make all travel through the Strait, according to documents for the first time by Reuters.

Additional climbing on the horizon?

Iran could attack Iraq to reduce world oil supply to further increase tensions. In January 2024, Iran attacked Iraq, which he said was in retaliation for armed attacks in its own territory, reported the New York Times.

“We must assume that we will lose the production of Iranian and Iraqi oil, which brings us to the point where we could see five to seven million barrels per day offline,” Gertken told Al Jazeera.

Gertken thinks that Iran would do this to provoke the West.

“They have to withdraw a little oil supply, but not attack Saudi Arabia or close the Hormuz Strait because, of course, this would guarantee that the United States enter the conflict. They must target regional production [where] They may have a plausible denial [and blame] A militant group.