What does the broad military conflict mean in Iran for oil prices? Here

He American military attacks in Iran They are asking questions about the impact on oil and gas supplies, including whether the broad conflict could lead to higher energy prices for Americans.

The price of the intermediate crude of western Texas, the American reference point, increased 4% on Sunday night shortly after the start of the negotiation, but fell more than 7% on Monday afternoon. The decline occurred when experts speculated that the Hormuz Straitan important commercial river route that the country controls in part and that is strategically vital for the flow of crude oil in global markets.

Iran’s Parliament approved Sunday by cutting the Strait, leaving the final decision before the country’s National Security Council.

The geopolitical crisis is causing concerns that the worsening of hostilities could squeeze the world oil supply, which would probably increase gas costs and other energy costs, as well as for other refined products of crude oil. Iran said Monday that He launched an attack at the American Air Base to Udeid in Qatar.

Iran, an important crude producer, controls the north side of the Hormuz Strait, which is used by ships that transport approximately 20% of the world’s daily oil supply.

“In practice, Iranian efforts to ‘close’ the Strait could cover a series of actions, including attacks and the arrest of ships that use the river route, preventing navigability through the narrow and, in the most extreme, mines in the sea,” said David Oxley, the main economist of Capital Economics of Capital Economics, in a report.

But, he added, “[S]Oh, when the conflict does not become a lasting war without “ramp outside the ramp”, and the interruption in the Strait remains limited to lower level actions seen so far, we suspect that any initial peak in global energy prices would dissipate in a short time. “

This is what you should know About Iran’s conflict Potential impact on oil and gas prices.

What is the impact so far on oil prices?

After emerging in the first operations on Monday, Brent Crude prices, the international standard, fell 0.1% to $ 76.98 for noon. The crude West Texas Intermediate (WTI), the American reference point, fell 3.8% to $ 71.06.

Even so, oil prices remain above their level before hostilities between Israel and Iran began more than a week ago, when a barrel of WTI crude had about $ 68.

Although Wall Street experts predict that it is unlikely that the hormuz narrow will close, they point out that the current tensions in the region could interrupt the energy market and send prices.

“Perhaps a greater risk for the oil supply of the region would be Israeli air attacks on Iran’s oil production and export facilities, and/or attacks of Iranian representation groups on oil production and export facilities in Iraq,” said analysts of the Eurasia group in a June 23 report.

Israel has so far avoided pointing to Iran’s oil exports industry. But if I did, such strikes could interrupt the flow of several million barrels per day, sending raw Brent prices above $ 80 per barrel, according to political risk consulting.

What would happen if the hormuz narrow is closed?

Because the hormuz narrow has only 21 miles wide at its narrowest point, it is vulnerable to interruption. The channel connects the Persian Gulf with the Gulf of Oman and the Arabic Sea.

Although energy experts believe that the closure of the Strait is unlikely, observing the adverse economic and geopolitical impact in Iran, they emphasize that an interruption of the oil flow through the passage would send the prices of the rise energy.

Petroleum interruptions that pass through the channel would severely affect markets in China, India, Japan and South Korea, according to the Energy Information Administration (EIA), a branch of the United States Energy Department.

The United States imports only about 7% of its oil through the hormuz narrow. But any interference with shipments that pass through the area could affect the world oil market by suffocating supplies, according to experts.

“[W]Hile will have not yet addressed the route, even a limited interruption would severely affect the global supply, “Oxford economy analysts said in a year of the June 20 client.” In the worst case, prices could increase to $ 130 per barrel and razor 0.8 percentage points of the global GDP. “

The last time Brent Crude exceeded $ 130 was in 2008, the result of an increase in energy demand and uncertainty in world energy supplies, according to EIA. At that time, gasoline prices reached approximately $ 4.11 per gallon, or around $ 6.26 per gallon today after adjusting inflation.

What is the prognosis for US gasoline prices?

It is likely that American drivers see higher prices in the pump during the next week, with prices that jump between 10 cents and 15 cents per gallon, said Gasbuddy analyst Patrick Dehaan.

“The majority/all the recent and expected increase is due to the tensions/situation of the Middle East,” News Moneywatch told News.

Even with that increase, US drivers would still probably pay less in the bomb that a year ago. The average price of US gases. Uu. It is now $ 3.22 per gallon, below $ 3.45 per gallon one year earlier, according to AAA.

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