Why the oil traders monitor the Strait of Hermoz

Israel’s strikes against Iran threatened to ignite the regional conflict that disrupts oil supplies in the Middle East, where traders revived the question, which is due to contracts about whether Tehran could respond by closing the biomedical criticism point in the Strait of Hormuz.

Brent crude, the global standard, increased by 12 percent to $ 78.5 a barrel in the early hours of Friday morning after Israel Dozens of strikes were launched Against the Iranian nuclear program and military facilities, killing at least two leaders.

Prices fell to $ 74 a barrel, as it became clear that Israel did not stop targeting Iran oil Infrastructure, but merchants said that prices can move much higher depending on how Tehran takes revenge on.

“The market is reasonably calm because the Israelis chose not to target the oil infrastructure, but if you are Iran, you know this is Achilles heel,” said a senior executive manager at Hermoiz.

About 21 million barrels of oil from Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates pass daily through the narrow waterway that separates the Islamic Republic from the Gulf states, which represents about a third of the oil supplies in the world.

Iran He repeatedly threatened to close the strait in the event of an attack, but he was never able to prevent all traffic. Although it is a pumping point for raw flows, the strait remains 35 miles in the narrowest point.

“The closure of the strait, although it is unlikely at this time, represents the most extreme measure that Iran can take,” said Amin Bakr, President of the Middle East and WVIC+ in the Energy Analysis Group. “While the American forces in the region interact immediately and reopen the strait, this would pay Brent prices to the top of $ 100 a barrel.”

Looking at the presence of the Fifth Navy in the Navy in Bahrain, Hemy Coftt, head of the global commodity strategy at RBC Capital Markets, said it would be “very difficult” for Iran to completely close the strait for a long time. She said that Tehran could have launched attacks on tankers to disrupt traffic, as it did during the Iranian Iraqi war in the 1980s. However, such a move would disrupt more than 1 million B/D to China.

When Iran and Israel exchanged air strikes in April and October 2024, it was Iran that struck first, with Israel’s revenge.

“This time, the sequence – a transformation that can significantly affect market expectations and risk perceptions, said. He said that if Iran disrupted oil flows through the Strait of Hormuz, the regional infrastructure of oil or hitting American military assets may lead to raising prices by “$ 20 per barrel or more.”

Some of the largest oil fields in the world, including in Saudi Arabia and Iraq, are accessible to missiles and drones in Iran. In 2019, it was widely believed that Iran was behind a drone attack on the largest oil processing facility in Saudi Arabia, which temporarily reduced the Kingdom’s raw production by more than half and briefly paid global oil prices by up to 20 percent.

However, the restoration of diplomatic relations between his head and Tehran in 2023 launched a repeated attack on the less likely oil facilities in Saudi Aramco, according to Kepler’s Bakr. She said: “The dynamics have changed between the countries of Iran and the Gulf over the past years.”

An alternative scenario may see that Israel is escalating from its attack by targeting the Iranian vital Island stations, which are responsible for 90 percent of Islamic oil exports and the Islamic Republic and the main source of funds for its government program and nuclear behavior.

Traders said that the prices, which are still lower than the levels earlier in the year that US President Donald Trump had previously launched the global tariffs raid, will be much higher if the markets are convinced that direct attacks on oil infrastructure.

“It is certain that the right price of oil is not in place today,” said trading chief executives. “The basics of (supply and demand) tells you that the price should be less than $ 10 or more. The risk bonus, if you need a risk bonus, may be the highest $ 10.”

Before the military escalation of this week, oil prices were generally decreased since March, as it decreased due to the expectations that the Trump tariff would harm the demand and the OPEC+ Cartel decision to accelerate the relaxation process in long -term discounts.

The group of producers, which is already led by the Kingdom of Saudi Arabia, agreed to restore up to 1.4 million barrels per day of the wrong capacity between April and July, and it is on its way to increase the group’s production by 800,000 barrels between August and September.

In the event of a major disturbance, for example for Iranian supplies, most merchants expect that OPEC will move to increase production faster. In theory, the group still has more than 5 ml -d/in hidden energy to re -online.

However, the group insisted on Friday that it was too early in any discussion about the withdrawal from the emergency shares.

He said in a statement, “(OPEC) confirms that there are currently no developments in the dynamics of supply or market that require unnecessary measures.”