""For oil markets, the concern is clearly what action would mean not only for Iranian oil supply, but also broader Persian Gulf oil flows, given the risk of disruption to shipments through the Strait of Hormuz," ING analysts said in a note on Wednesday. Iran exports about 1.5 million barrels per day, mostly to China. But the Strait of Hormuz, the narrow sea passage next to Iran, is a choke point that handles a whopping one-fourth or so of the world's maritime oil trade."
"These conditions - and hence rather modest U.S. gasoline prices - expand President Trump's geopolitical running room. What they're saying: "Geopolitical issues, above all Iran, are the key bullish factor in the oil market at the moment," University of Texas-Austin energy analyst Ben Cahill tells Axios via email. "Otherwise there's not a whole lot of price support toward $70 [per barrel]. The slack in this market could embolden the White House," he said."
Oil prices jumped over 4% and continued rising, with Brent above $71 per barrel and WTI near $66. Concern centers on potential disruption to Iranian oil and broader Persian Gulf flows, especially shipments through the Strait of Hormuz, which handles about a quarter of maritime oil trade. Iran exports roughly 1.5 million barrels per day, mainly to China. Market slack from modest demand growth and rising output keeps overall supply relatively ample and U.S. gasoline prices modest. Limited short-term spare capacity outside Saudi Arabia could leave markets exposed if conflict disrupts supplies.
Read at Axios
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