Eve here. This post is another example of hopeful thinking among a class of investors, as perhaps well-informed executives dismiss the idea that Iran would close the Strait of Hormuz, a key chokepoint in oil transport.
And that complacency seems like it’s tragic. If many commentators believe, if Trump is committed to Iran, these investors didn’t list prices in advance. We pointed out investors who voted on their feet by dumping the Treasury for 10 and 30 years when Trump launched tariffs on the release day and then entered a tariff hike match with China. Trump’s retreat (reducing China’s collection and lowering tariffs in other states) is widely assumed to be due to Upchuck’s financial market.
If investors are adopting war risks, especially World War II or nuclear war risk, they will have serious cases of investment categories as serious as they should be. I’m old enough to remember Operation Desert Storm. Stocks had fallen significantly before the campaign began. They jump sharply when the action on the first day worked, indicating that investors are concerned that the manipulation is pear-shaped and released when it wasn’t. Still, American citizens remained cautious. I commute to Chicago every week, and the plane was full of at most 1/3 of the time for the next few months.
Therefore, financialization contributes to a polluted information environment. Donald Trump may believe that if attacking Iran is truly all dangerous, those well-informed investors are telling him so by brightening up the stock. The failure to reduce their exposure is evidence of a high probability of success. However, this also seems to be led from above. Due to competing obligations, I had no chance to check the Fed’s statements about its latest rate (in) action and outlook. However, in searching articles by Wolf Richter and Michael Shedlock, there is no contact mention of war risk.
Returning to the heading issue, the question is whether Iran will close the Strait of Hormuz. Remember that Lloyd’s list pointed out that he knows one or two things about shipping costs. I said:
The conflict between Israel and Iran will likely close the Strait of Hormuz to shipping, said Jakob Larsen, Bimco’s chief safety officer.
The conflict between the two will “become a major concern for shipping in the Middle Eastern Bay and adjacent waters,” Larsen said.
“The most likely scenario may not directly affect transportation, but attacks can escalate and impact shipments, along with troops from other countries operating in regions, including the United States.
“A full-scale armed conflict between Israel/US and Iran will effectively close the Strait of Hormuz for at least a certain period of time and raise oil prices.”
Security sources are now urged to be careful when passing through the Middle Eastern Bay and surrounding waters in areas where there is no direct threat to transportation, but where the situation can escalate very quickly.
In light of the above views, he pointed out that Iran may not even need to close the Strait of Hormuz to take some military action. Even adequate threat display and noise making could result in ships and cargo insurance companies ceasing to terminate issuance policies or pricing higher prices to continue operating in the Persian Gulf. It also links to a story that shows that tanker rates in the Gulf have already jumped.
Reader safety was first noted:
Strait of Hormuz.
Commentators who heard I spoke about it seem to remember the war between Iran and Iraq. During some parts of Iran making tanker traffic very successful in the Gulf Coast, I didn’t make you a child and dropped some World Irish from the back of a motorboat. Apparently, the tanker captain hates sailing in waters that could even be blown up into the mine. sissies. Anyhoo, this reminded the United States still had a small fleet of clear ships in the mine.
But my point is, I doubt Iran has forgotten. Recently, other than mines, there are things like skybornes and water drones. Furthermore, Houthis, located on the side of the Arabian Peninsula, is next to another maritime choke point. So for a short period of time, the navy is trivial without a functioning navy. Of course, do you need more than a month of oil to stay closed to keep the more dramatic measures closed? The flip side is, of course, this is Iran’s “nuclear choice” and I doubt they will use it unless they absolutely have to.
I don’t know if I agree to the Safety First closure claim. From a retaliation perspective, Iran has already threatened to strike US bases and assets in the region if the US attacks. Going there seems to be a greater escalation move than closing the strait, especially if the Americans die. The United States must respond very strongly, and such punishments could serve as justification for nuclear deployment. Maybe I’m missing something, but I don’t know that closing the Strait of Hormuz as justifying that level of response. But once again, the US may be planning a nuclear strike, regardless of whether it will get enough hot water.
Anyway, as readers will see immediately, the airy layoffs below are great. Iran will not close the Strait of Hormuz. This will be an existential struggle for Iran. They realize they have to suffer more pain than they are suffering from Israeli airstrikes now. The fact that market participants are unable to recognize what is obvious is impressive.
Charles Kennedy, author of oil earrings. It has been originally published Oil price
- Despite the strategic importance of the Strait of Hormuz, the oil market currently shows little response to escalating regional tensions.
- Eni’s CEO predicts Iran will avoid closing the Strait of Hormuz due to the economic harm of self-harm.
- Regional buyers such as Indian refiners are actively increasing oil purchases from alternative sources such as Russia and the US to mitigate potential supply risks.
The Strait of Hormuz may be one of the world’s most strategically sensitive energy corridors, but the oil market has not yet flashed. ENI CEO Claudio Descalzi Predicting Iran cannot afford this option.
Brent’s response on Wednesday at around $77 per barrel shows that traders view the real possibility of closure as remote, despite strengthening hostility between Iran and Israel.
“It’s very difficult to stop the Strait of Hormuz because everyone, including Iran, is affected,” DeKarji told Reuters about a bystander at an industry event. “I think they’re more reasonable than that.”
That’s a dangerous bet. Around 20% of the world’s oil and LNG are passing through this narrow marine bottleneck. Iran rattles off Sabers before, but never followed them. Descargi claims it is self-destruction. Tehran’s own exports suffer, and the US is not sitting vaguely.
Still, market self-satisfaction is being tested. Tanker freight rates have skyrocketed by 40% over five days, indicating that risk premiums are creeping up. That’s not surprising. A single incident could flow overnight.
Some analysts warn that prices could skyrocket $30 in the worst-case scenario, and that Asian refiners are being hit hardest. This includes China and India, which consume the proportion of lions in Gulf exports. They quietly restructure their trade routes, focusing on West African barrels and long-distance contracts.
In the case of ENI, Middle Eastern instability lands when it attempts to reconstruct itself. The company is promoting capital raising of 2 billion euros by selling some of its abundant renewable energy units and redirecting cash to biofuels and low-carbon hydrogen.
Descalzi’s warning highlights how the market is priced in reasonable restraints, but local buyers are not taking the opportunity. Indian refiners Already bolstering purchases from Russia and the US for June, offsetting potential disruptions in the Gulf.
