On Saturday, the United States and Israel carried out a joint military strike, successfully eliminating many top Iranian officials, including Hamenei. Many anticipate that international oil prices will experience significant fluctuations in the coming week, but the extent of the impact on Middle Eastern oil supply remains uncertain.
According to simulations conducted before the recent conflict with Iran, if the attack did not affect major Iranian oil pipelines, facilities like Kharg Island, and shipping routes, oil prices may only temporarily rise before stabilizing quickly.
However, if oil facilities are damaged or if shipping of oil tankers through the Strait of Hormuz is disrupted, leading to a halt in crude oil supply, oil prices could face more severe and prolonged increases. Due to the fear associated with war, there is a tendency for oil prices to rise.
Currently, Iran exports over 80% of its daily crude oil (approximately 1.6 million barrels), with most of it going to China. As China’s refineries, under the control of the Chinese government, ignore U.S. sanctions on Iranian oil sales, they have become the largest buyers. If this supply is interrupted, China is likely to seek alternative sources in the global market, leading to an overall increase in oil prices.
On February 14, a senior U.S. official stated that the United States is exerting maximum pressure on Iran, including the issue of its oil sales to China.
Another concern lies in the Strait of Hormuz, as up to 20% of global oil supply passes through this vital route daily, including the exports of oil-producing countries in the Middle East such as Saudi Arabia, Iraq, and the UAE.
However, analysts point out that Iran has no motive to block this strait, as it would not only cut off its own oil exports but also offend China, a major customer.
According to pre-war predictions by energy consultancy firm Rystad Energy, if there is a limited strike on Iran’s nuclear facilities and Revolutionary Guards without triggering regime change or all-out war, the market’s “panic sentiment” could push oil prices up by $5 to $10.
Nevertheless, with the successful elimination of Hamenei and other top Iranian officials by the U.S. and Israel, the future outcomes may be different.
Analysts at the Washington-based think tank Center for Strategic and International Studies (CSIS) project that in the event of a broader war, Iranian interference with tanker passages could push crude oil prices above $90 per barrel, with domestic gasoline prices in the U.S. also rising well above $3 per gallon – according to data from the American Automobile Association (AAA), the average gasoline price in the U.S. was $2.98 per gallon last week.
(Reference: Associated Press)