Oil spikes as Trump's attack on Iran ramps up risks to supplies
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Global benchmark Brent rallied as much as 5.7% to $81.40 a barrel, before paring some of that gain in heavy trading. Timespreads widened. US President Donald Trump said air attacks had 'obliterated' the trio of targets, and threatened more military action if Iran didn't make peace. In its initial reply, Tehran warned the strikes would trigger 'everlasting consequences.'
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Brent's prompt spread — the difference between its two nearest contracts, and a closely followed metric — widened to as much as $1.99 a barrel in backwardation, from $1.53 on Friday. That's a bullish pattern indicating concern about tight prompt supplies.
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The US assault — which targeted sites at Fordow, Natanz, and Isfahan — dramatically raises the stakes in the confrontation and increases the premium that traders are pricing into the global energy market. Still, the extent of the gains will depend on how Tehran opts to respond to the US moves.
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The oil market has been gripped by the crisis since Israel attacked Iran more than a week ago, with futures pushing higher, options volumes spiking along with freight rates, and the futures curve shifting to reflect tensions about tighter near-term supplies. The Middle East accounts for about a third of global crude output, and a sustained increase in prices would boost inflationary pressures worldwide.
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'The market will closely watch Iran's response — particularly whether it will move to disrupt Middle Eastern oil flows, directly or indirectly through its regional proxies,' said Muyu Xu, a senior crude analyst at Kpler Ltd. 'If Iran blocks the Strait of Hormuz, even for one day, oil can temporarily hit $120 or even $150.'
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There are multiple, overlapping risks for physical crude flows. The biggest centers on the Strait of Hormuz, should Tehran seek to retaliate by attempting to close the chokepoint. About a fifth of the world's crude output passes through the waterway at the entrance to the Persian Gulf.
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Iran's parliament has called for the closure of the strait, according to state-run TV. Such a move, however, could not proceed without the explicit approval of Supreme Leader Ayatollah Ali Khamenei.
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In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a 'Transaction'). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company. In this respect, there is a concrete conflict of interest in the reporting on the companies. In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual this reason, there is also a concrete conflict of interest. The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies. 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