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The escalation of the war of words between US President Donald Trump and Iran was met with a shrug resigned from the oil market.
But if the assessment that the war between the two adversaries remains highly unlikely is a – Iran knows that its army is no match for the United States and Washington does not have much appetite for an immediate conflict – it does not mean that oil traders can afford to be complacent.
energy supplies. Iran's threats to block the Strait of Hormuz – the narrow waterway that separates it from the Gulf States, through which passes about a third of the world's oil shipments by sea – deserve to be taken seriously.
The Strait of Ormuz has long been the world's largest access point for global oil supplies, with shipments from Saudi Arabia, Iraq, Kuwait , Qatar and Iran itself transiting through the waterway which measures only 21 miles wide. Statistical branch of the Ministry of Energy, said 18.5 million barrels per day of crude and refined products crossed the strait in 2016, as well as liquefied natural gas deliveries from Qatar – the world's largest supplier of LNG.
The risk, therefore, is clear. With new US sanctions aimed at cutting much of Iran's oil exports from November, the likelihood of Tehran continuing to threaten energy shipments from Washington's allies in the region is increasing.
Although widely regarded as an option of last resort For Iran, the frustration caused by the withdrawal of the Trump administration from the nuclear deal and the fear of a Long-term policy of regime change could alter Tehran's calculations. While the US military has promised that any attempt to subvert the Strait would be quickly addressed – the fifth fleet is based in Bahrain and patrolling the waterways – the oil market is likely to respond violently to even short-term disruptions or to asymmetrical threats given the importance of the road.
Iranian military capabilities, although largely overshadowed by US firepower, can still cause problems. anti-ship missiles based. The crude market could be well supplied after Saudi Arabia and its allies have moved to increase production in preparation for US sanctions reducing Iran's own exports.
But the capacity cushion available on the world oil market is incredibly thin. a result, with little surplus production that could be quickly produced if Iran managed to block or slow shipments. Many countries that increase production depend on transit in the strait.
The oil market is already asking how to offset the impact of US sanctions on Iran's 2.5 mb / d of exports if they succeed in pushing them toward "zero" as the # 39, said the Trump administration.
To what extent will the United States finally manage to reduce the price of oil? But Tehran's response will also have to be taken into account more and more.
Crude prices already indicate that traders are expecting higher prices later this year. The so-called futures curve has in part seen depressed forwards due to higher production over the coming months, with prices being lower than those of future deliveries, a classic sign of oversupply in the US. short term. Contract prices for future shipments will increase as US sanctions move closer, pushing the back of the futures curve upward. With so much uncertainty created by the tensions between Washington and Iran, oil producers are also less likely to sell their production in the short term, preferring to wait and see what happens rather than missing out from a big price jump.
In the second half of this year, the future of Iranian oil exports and the Strait of Ormuz constitutes the greatest risk of supplying the energy markets.
Trump's Tweets could target Tehran, but also a message to oil traders: BE CAREFUL ".
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