RIYADH: As the crisis between Iran and the US-Israel alliance persisted, oil prices rose above $100 per barrel on March 9 for the first time since 2022, but analysts think further shocks may be in store.
Oil markets are now more concerned about how long supply and storage buffers can withstand a protracted disruption to flows via Hormuz, a chokepoint that handles a significant portion of Gulf crude and liquefied natural gas exports, than just the initial price spike.
The impact could be exacerbated by additional escalation near Iran’s export center of Kharg Island. The site, which handles over 90% of Iran’s cargoes and acts as the primary outlet for pipelines from its largest producing fields, is referred to by JPMorgan as the backbone of the country’s petroleum export infrastructure.
A further 1 million to 1.5 million barrels per day of losses could boost total outages to at least 5 million barrels per day, or more than 8 million barrels per day including refined products. In that case, regional supply disruptions could worsen considerably. According to Norbert Rucker, head of economics at Julius Baer, “oil markets have entered panic mode.” “As the Iran war raises stress levels, prices surged into the triple digits,” he continued.
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