US EditionThe Iran Risk Is Keeping Oil Prices Elevated
Markets embed a $7–$12 per-barrel risk premium due to possible disruptions in the Strait of Hormuz, which handles one-fifth of global petroleum liquids.
- This past week, Brent prices remained above $70 as markets price an estimated $7 to $12-per-barrel Iran risk premium, reflecting supply disruption fears.
- As long as nearly 20% of global oil transits the Strait of Hormuz, Iran's exports of roughly 1.3 to 1.5 million barrels per day keep supply vulnerable.
- The U.S. Energy Information Administration reported a 16-million-barrel build in U.S. crude inventories, the largest weekly increase in three years; the U.S. Strategic Petroleum Reserve holds roughly 415 million barrels with limited drawdown capacity.
- Temporary disruptions and limited reserve capacity mean markets can tighten quickly, as even tanker seizures or insurance restrictions can spike freight rates; the SPR cannot offset prolonged Persian Gulf crises.
- Iran has accelerated loadings from Kharg Island, signaling geopolitical risk, while U.S. oil production remains near record levels and inventories build, creating a split market traders watch closely.
15 Articles
15 Articles
The U.S. and Israel have begun their attack on Iran on Saturday, February 28. Iran has severely counterattacked Israeli soil and U.S. bases in several countries in the area. The duration and intensity of the attacks will also depend on the reaction in the energy markets. A brief and contained military action could have a more limited impact on prices. A longer campaign, with logistical interruptions or reprisals in the Strait of Ormuz, the plane…
The US and Israeli attack on Iran has raised concerns about Iran's blockade of the Strait of Hormuz. The Strait is a major artery for global maritime energy transport, and if it were to be blocked, it would inevitably lead to a surge in crude oil prices and a blow to the global economy.
Oil prices rise on fears of US attacks on Iran, increasing concerns about a regional conflict and global crude supply
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