US-Iran conflict sparks concern among analysts over Middle East oil supplies

LONDON: The spiraling Iran crisis has sparked fear among analysts over oil supply in the Strait of Hormuz — a vital shipping lane for a fifth of global crude — and also over Iraq’s output.
Oil prices had surged last Friday after US President Donald Trump ordered the drone assassination of Iran’s top general Qasem Soleimani, but the market stabilised on Monday and Tuesday with Middle East crude supplies unaffected.
However on Wednesday, the oil market shifted higher once more after Tehran launched revenge attacks to target US forces in Iraq, making good on its pledge to hit back over the killing.
Iran fired missiles overnight at Iraqi bases housing the US and British military, officials in Washington and Tehran said.British Foreign Secretary Dominic Raab voiced concern over “reports of casualties”. But Iranian Foreign Minister Mohammad Javad Zarif insisted that the country does “not seek escalation or war”.
Traders remain fearful nevertheless that Tehran could seek to block the Hormuz waterway — a key artery for crude that stretches between Oman and Iran.
Hormuz, one of the world’s most congested transit points, links up the region’s oil producers with markets in Asia, Europe and North America.
Disruptions at forefront
“Supply disruptions were put at the forefront of the agenda for investors,” said Mihir Kapadia, CEO of Sun Global Investments.
“These concerns have been fuelled by Friday’s killing of Soleimani and it is likely Iran will try and disrupt oil exports that travel through the Straits of Hormuz.
“However … it remains unclear as to what the next developments will be.”
The US government’s Energy Information Administration describes Hormuz as “the world’s most important oil transit chokepoint” through which 21 million barrels of crude per day passed in 2018.
The strait had already been rocked last year by a string of attacks that Washington and its allies blamed on Iran, accusations Tehran firmly denied.
Its Western foes have also accused Iran of being behind a major attack on Saudi oil installations and Iran has in recent months also repeatedly seized tankers operating in the Gulf.
Traders remain less fearful over the loss of Iranian oil because the Islamic republic remains under punishing US sanctions that were re-imposed by Trump in 2018.
Energy Aspects analyst Christopher Haines noted traders were instead worried about oil output from Iraq — particularly if US troops are pulled out.
America’s military strategy in Iraq was thrown into confusion Monday as the Pentagon admitted a letter from a general informing the Iraqi government of an imminent US troop pullout was sent by mistake.
“There is a potential risk of disruption on Iraq, whose crude exports represent (about) 3.5 million barrels per day,” Haines told AFP.
“If US troops leave, it will leave the area less secure,” he added.
Iraq is currently the second biggest player in oil cartel OPEC after kingpin Saudi Arabia.
SEB analyst Bjarne Schieldrop agreed that Iraqi production could be impacted by the current crisis — but so far no oil supplies have been affected.
‘Not single drop lost’
“Eventual loss of supply in the Middle East may however be in Iraq down the road and not so much due to near term retaliations, though so far not a single drop of oil supply has been lost,” he said.
Soleimani’s assassination, which was carried out by a drone near Baghdad airport, sparked concern about a spreading conflict.
Europe’s benchmark oil contract Brent and US counterpart West Texas Intermediate crude had initially won more than three per cent each on Friday.
However, those gains fell far short of September 16, when both contacts had rocketed about 14 per cent on news of attacks on Saudi Arabian oil infrastructure.–AFP


  1. Good day! Do you know if they make any plugins to help with Search Engine Optimization? I’m trying to
    get my blog to rank for some targeted keywords but I’m not seeing very good gains.
    If you know of any please share. Kudos! You
    can read similar text here: GSA List

  2. Wow, marvelous weblog format! How lengthy have you ever been blogging for?

    you made blogging look easy. The total glance of your site is fantastic,
    as neatly as the content! You can see similar here dobry sklep

  3. Wow, fantastic blog layout!
    How long have you ever been running a blog
    for? you made blogging glance easy. The whole glance of
    your web site is wonderful, as well as the content!

    You can read similar here prev next and it’s was wrote by Percy73.

  4. Wow, marvelous blog structure!
    How long have you ever been running a blog for?
    you make running a blog glance easy. The whole glance of
    your website is wonderful, let alone the content material!

    You can see similar here prev next
    and those was wrote by Margarete64.

  5. Informative Site… Hello guys here are some links that contains information that you may find useful yourselves. It’s Worth Checking out 급전

  6. I’m always impressed by the depth of knowledge and insight you bring to your posts. This was another fantastic article. Thank you!echozone

  7. May I simply just say what a comfort to find an individual who truly knows what they’re discussing on the web. You certainly understand how to bring an issue to light and make it important. More people really need to check this out and understand this side of your story. I was surprised that you aren’t more popular given that you most certainly have the gift.

  8. Spot on with this write-up, I absolutely believe this amazing site needs much more attention. I’ll probably be back again to read more, thanks for the info!

Leave a Reply

Your email address will not be published.