Joint US-Israeli military strikes on Iran and Tehran’s retaliatory missile attacks on Gulf countries are forcing oil traders to suspend shipments through the Strait of Hormuz, a key route for global oil exports. Global energy markets have faced one of the most serious shocks in decades. The US-Israeli strikes and Iranian missile responses are disrupting oil exports from the region, which supplies about 20% of global supplies. This was reported by Reuters.
Explosions were recorded in the UAE and Kuwait, major oil exporters. Qatar, the world’s second-largest exporter of liquefied natural gas, reported intercepting missiles aimed at its territory. Explosions were also recorded in Bahrain and near the Iranian island of Kharg, through which about 90% of Iran’s oil exports pass. At the same time, Tehran transferred most of its accumulated oil to tankers in advance.
There has been no confirmed damage to oil and gas infrastructure due to Iranian strikes so far. There have been no official reports of disruptions to shipping through the Strait of Hormuz, although the Islamic Revolutionary Guard Corps Navy has banned ships from passing through it. Experts warn that even in the absence of physical damage, this does not rule out the development of a crisis.
The risk that tankers may be under threat of attack is forcing producers, traders and shipowners to review oil and LNG transportation routes. Reuters reports that several major oil companies and trading houses have already suspended shipments through the strait for several days.
Freight rates for large oil tankers on the Middle East-China route, which have already risen due to tensions, are set to rise further. Oil prices, which reached around $70 a barrel the day before, could rise sharply in the next auction. The scale of the shock will be determined by the duration of the conflict.
