Latest news with #Lipow
The Hill
24-06-2025
- Business
- The Hill
Iran conflict poses minimal threat to US gas prices
Americans could see modest increases in the prices they pay at the pump in the wake of increasing conflict with Iran, analysts say. Andrew Lipow, president of consulting firm Lipow Oil Associates, told The Hill on Monday that any additional increases in gasoline prices will likely be just a few cents. 'I expect that gasoline prices are going to drift up about three to five cents a gallon over the next couple of weeks,' Lipow said. He added that after an initial 5 percent jump in the price of crude oil, 'the market has sold off since then and now has turned negative.' Oil prices fell on Monday, and U.S. benchmark WTI crude was down to about $69 per barrel on Monday afternoon — after jumping as high as $75 per barrel late last week in anticipation of U.S. strikes on Iran. The U.S. hit Iranian nuclear facilities on Saturday night, bringing the country directly into Iran's conflict with Israel. Gasoline prices were higher on Monday, averaging $3.22 per gallon, up from $3.14 a week ago. Austin Lin, principal analyst for refining and oil products at Wood Mackenzie, told The Hill he believed that fuel prices were higher than they would otherwise be as a result of the conflict, but that he did not believe they would rise much further. 'There's a good argument that says Q3 versus everyone's expectations from a month ago is going to see higher pricing,' Lin said. 'I would temper that and say, I don't think there's probably a lot of uplift from where we currently are.' Vincent Piazza, senior energy analyst at Bloomberg Intelligence, said he also 'wouldn't expect any drastic or dramatic change as we move into the summer months.' Piazza said there's 'no reason to panic right now,' noting that there's not currently any new obstructions to Middle Eastern oil and gas. 'The keys, what we want to think about is…is capacity being curtailed? Is the flow of molecules being curtailed? Globally, we're fairly well supplied at this point,' he said. The oil market is a global one, meaning that events around the world can impact what prices U.S. consumers pay at the pump. Iran itself is a significant producer of oil, though it cannot sell to the U.S. or many countries due to sanctions. It does still sell to China. While current conditions do not appear to be having a dramatic impact outside of an initial jump, that could change amid further retaliation, or if Iran decides to try to shut down the Strait of Hormuz, through which much of the world's oil flows. 'The market thinks that China, who's already purchasing over 90 percent of Iranian oil exports, along with significant quantities of other Middle Eastern crude oil, is pressuring Iran to avoid shutting the Strait of Hormuz,' Lipow said. Lin said that he believes it's unlikely that Iran will close the strait because doing so would hurt its own economy. 'It would be political suicide, both with their neighbors and with their primary purchasers,' he said. 'The Iranian economy is largely popped up by oil exports,' he said. 'And if you take away China's supply of Middle Eastern oil, not just from Iran, they are pretty quickly going to stop being your friend when it comes to buying sanctioned oil.' The Trump administration, however, appears to be politically sensitive to gasoline prices, as President Trump campaigned specifically on bringing them down. Over the weekend, Secretary of State Marco Rubio encouraged China to tell Iran to keep the strait open. 'I would encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil,' Rubio told Fox News. And on Monday, President Trump wrote on Truth Social ''EVERYONE, KEEP OIL PRICES DOWN.' 'I'M WATCHING! YOU'RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON'T DO IT!' he added.
Yahoo
23-06-2025
- Business
- Yahoo
Oil prices retreat as markets assess Iranian retaliatory strikes are unlikely to affect global supplies
U.S. oil prices sank Monday afternoon as markets assessed that reports of retaliatory strikes by Iran were unlikely to affect energy supplies in the Middle East. The U.S. crude oil price benchmark, West Texas Intermediate, fell 7% to less than $69 a barrel — the lowest price in more than a week — after having climbed as much as 4% overnight. The global Brent crude price benchmark likewise fell about 7%. Major stock indexes turned positive. Just after 1 p.m. Monday, Iran said it had launched missiles toward a U.S. base in Qatar. Reports suggested the missiles had been intercepted. Markets are viewing the strikes "as more of a symbolic retaliatory attack rather than one to result in significant damage to USA assets in the region," said Andy Lipow, president of Andy Lipow Associates energy consultancy and an oil markets expert, in an email to NBC News. As a result, he said, oil markets have begun selling off, since it appears shutting down marine traffic through the Strait of Hormuz, a chokepoint in the Persian Gulf through which about one-fifth of the world's oil supply travels, will not figure into Iran's retaliatory measures. It also sets up the possibility for a diplomatic resolution to the conflict, which first heated up last week following Israeli strikes on Iranian targets, Lipow said. Kevin Book, heard of research at ClearView Energy Partners consultancy said in an email that markets had primed themselves for a worst-case scenario in the run-up to Monday afternoon. "This may be that market selling the news, especially if Iran's retaliation had limited impacts," he said. Trump has signaled he is keenly aware of the market's response. Earlier Monday, he posted on his Truth Social platform: 'EVERYONE, KEEP OIL PRICES DOWN. I'M WATCHING! YOU'RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON'T DO IT!' It is not clear who he was addressing, as prices are controlled by market forces weighing supply and demand. Over the weekend, Iran's state-owned media reported that Iran's parliament backed closing the Strait of Hormuz — but that the final decision lies with Iran's national security council, according to the report. While the strait represents a vital node for global oil supplies, it now accounts for only about 7% of total U.S. crude oil imports. Overall, U.S. crude oil imports from countries in the Persian Gulf fell to their the lowest level in nearly 40 years last year thanks to booming domestic production and imports from Canada, according to the U.S. Energy Information Administration. The past 12 hours have seen volatile trading in oil markets as traders assessed the potential fallout from the weekend U.S. strikes on Iranian nuclear facilities. Wall Street analysts said that by ordering the strikes, President Donald Trump has injected further uncertainty into markets already on edge from his on-again, off-again tariff announcements. 'There is in our view a wide range of outcomes for oil prices in the next few weeks,' analysts with UBS financial group wrote in a note to clients. 'The nature and extent of Iranian retaliation remains the key parameter.' Analysts with ING financial group earlier outlined four possible avenues for Iran: full escalation that also draws in other nations such as China or Russia; disruption of the Strait of Hormuz; active or passive support for terrorist attacks in the U.S. and Europe; or taking no action at all. 'We will abstain from speculating about the next steps and instead conclude that the most likely economic consequences from the US strikes will be on general uncertainty and on the price of oil,' the ING analysts wrote in a note to clients. This article was originally published on Sign in to access your portfolio
CNBC
23-06-2025
- Business
- CNBC
Tankers reversing course from Strait of Hormuz following U.S. attack on Iran nuclear sites
More tankers are reversing course away from the Strait of Hormuz as concerns rise on the possible closure of the vital chokepoint of trade. Yui Torikata, senior liquid market analyst at industry data firm Kpler, said the situation is fluid. The firm's data is showing a notable event occurred between early Sunday and early Monday, when at least six vessels — two very large crude carriers, three chemical tankers, and one refined products carrier—diverted their courses away from the Strait of Hormuz. The specific vessels identified are: All vessels are in ballast, meaning they either are empty or carrying light loads. "However, the situation has already evolved," Torikata said. "As of this morning, three of those six vessels —the South Loyalty, Coswisdom Lake, and Damsgaard — have again changed direction and are now heading back towards the Strait of Hormuz. The other three vessels are currently idling off the coasts of Khor Fakkan and Muscat." "This specific weekend event should be seen in a broader context," said. "In the immediate wake of the Israel-Iran conflict, the number of available empty [ballast] crude carriers within the Middle East Gulf zone fell to a record low, indicating significant reluctance from shipowners to enter the area. However, that trend has since reversed. "The count of available tankers recovered toward the weekend, and the number of crude carriers in the Gulf of Oman signaling their intent to enter the Mideast Gulf has also recovered from the low seen on June 16," she added. "This suggests that, for now, the overall flow of vessels into the region is being sustained despite the recent, specific diversion event." The moves follow a U.S. attack Saturday on what have been identified as three major nuclear enrichment facilities in Iran. Andy Lipow, president of Lipow Oil Associates, said the reports by the UK Maritime Trade Operations on widespread electronic interference and GPS jamming and location spoofing are adding to vessel owners' worries. "Combined with increasing insurance costs, some owners will simply avoid the area — like Frontline. This causes a de facto partial supply disruption if there is a lack of tankers to carry the oil that needs to be exported," Lipow said. Frontline tanker Front Eagle and dark fleet tanker Adalynn collided last week near the Strait of Hormuz. Following the collision, a fire on the deck of the Front Eagle erupted and was extinguished. "Some tanker owners may feel that China, who buys 90% of Iranian crude oil along with significant quantities of oil from the Middle East, is pressuring Iran not to disrupt shipping," Lipow said. "While oil exports are Iran's economic lifeline and it would not be in Iran's interest to halt its own exports, if cornered, Iran might decide to inflict as much economic pain as it can on the rest of the world." Lipow added this attack could spark additional geopolitical instability. "While China has condemned the United States attack on Iran, we have not seen China provide Iran with any kind of support other than words," Lipow said. "Russian attacks Ukraine, the United States attacks Iran, now China may feel emboldened to attack Taiwan." Jakob Larsen, head of security at Bimco, the world's largest direct-membership organization for shipowners, charterers, shipbrokers, and agents, warned Iran could attempt a wider disruption of commercial shipping in the Strait of Hormuz through attacks on merchant ships. Anti-ship missiles or drones of both airborne and surface types could be used in these attacks, he said. "The laying of sea mines would constitute another dangerous development, but Iran's intent to do so is questionable due to the risk to Iran-affiliated commercial ships and the risk of environmental disaster in case a ship is damaged," Larsen said. The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, is recognized as one of the world's most important oil chokepoints. The inability of oil to traverse through, even temporarily, can ratchet up global energy prices, raise shipping costs and create significant supply delays. In 2023, oil flows through the waterway averaged 20.9 million barrels per day, accounting for about 20% of global petroleum liquids consumption, according to the U.S. Energy Information Administration. Hormuz handles less than 4% of global container trade, but the ports of Jebel Ali and Khor Fakkan are critical intermediary points for global shipping networks in the region. The majority of cargo volumes from those ports are destined for Dubai, which has become a hub for the movement of freight with feeder services in the Persian Gulf, South Asia, and East Africa.
NBC News
22-06-2025
- Business
- NBC News
Oil prices jump following U.S. strike on Iranian nuclear facilities
Oil prices jumped and stock futures slipped Sunday evening, indicating concern among investors about the possibility of economic fallout from the ongoing unrest in the Middle East following U.S. strikes against Iran's nuclear facilities. The major focus is on oil. Iran remains a major international oil supplier, and it also sits on the Strait of Hormuz, a heavily trafficked waterway in the Persian Gulf that is a key transit channel for about one-fifth of the world's oil supply. Concerns centered on whether Iran would begin limiting or shutting down access to the strait. U.S. Secretary of State Marco Rubio said in a statement that closing the strait would be tantamount to 'economic suicide' for Iran and called on China, Iran's top trading partner, to head off any attempt by Iran to affect traffic. U.S. and global oil benchmark prices opened up 4% Sunday evening, underscoring the concerns about what the conflict means for the world's oil supplies. Oil prices already gained about 3% last week in the wake of Israel's initial strikes against Iranian targets and Iran's retaliatory missile attacks. Stocks also slid Sunday. S&P 500 futures contracts declined about 0.6% in the first hour of trading, while Dow Jones Industrial Average futures fell about 250 points, or 0.6%. Nasdaq 100 futures dropped 0.7%. U.S. markets officially open at 9:30 a.m. ET Monday. 'Should oil exports through the Strait of Hormuz be affected, we could easily see $100 oil' or an increase in U.S. gas prices by 75 cents per gallon, Andy Lipow, president of the consulting firm Lipow Oil Associates, said in a note to clients Sunday. In a worst-case scenario in which oil prices rose to at least $120 a barrel, U.S. gas prices would increase as much as $1.25 per gallon, Lipow said. In a follow-up email, Lipow said that even if the strait does not officially close, any action by a tanker company to pre-emptively reduce its footprint there represents 'a de facto supply disruption.' Iran's state-owned media reported that Iran's parliament backed closing the strait — but that the final decision lies with Iran's national security council, according to the report. Any move by Iran to alter traffic in the strait could also hurt its own economy — particularly commerce with China. On Sunday, a department of the U.K. Royal Navy said it observed 'electronic interference in the Strait of Hormuz.' At least two massive supertankers that had entered the strait were reported to have made U-turns. Marine tracking websites also showed the vessels turning about halfway through the strait. 'I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil,' Rubio said in an interview on Fox News. China is Iran's most important oil customer, and they maintain friendly relations. Iran may still be assessing the ultimate damage to its nuclear facilities as it contemplates its next move. The International Atomic Energy Agency said Sunday that while it had confirmed that the Fordo, Natanz and Isfahan sites had been hit, it was not immediately possible to assess the damage at the Fordo site. Until last week, U.S. stocks had been enjoying a substantial, if volatile, recovery from the lows following President Donald Trump's reciprocal tariffs announcement in April. That momentum reversed after Israel announced last weekend it had struck key Iranian military and nuclear targets, prompting retaliatory missile strikes on Israeli targets by Iran. JPMorgan analysts said Sunday that investors had voiced concerns to them last week that the Iran-Israel conflict would spread, 'and those concerns have been materialized.' 'Trump's statement that this might be the only US attack or might begin a series of attacks brought us little certainty,' the analysts added in a note to clients. 'Moreover, we do not see an obvious route to a political settlement to the military conflict, which makes us think the conflict, like the one in Gaza, could last longer than many investors think.'
Politico
13-06-2025
- Business
- Politico
‘The White House should be worried': Oil prices soar after Israel's attack on Iran
Israel's attack on Iran has President Donald Trump facing the prospect of the same economic nightmare that helped unravel Joe Biden's presidency — rapidly spiking energy prices triggered by a war outside his control. The series of airstrikes that began Thursday night caused the world benchmark oil price to jump to $73 a barrel as of noon Eastern time Friday, up $8 since early Wednesday, with the promise of more price hikes to come if the fighting spreads. Energy analysts said the price could shoot to $100 a barrel — a level not seen since the aftermath of Russia's invasion of Ukraine in 2022 — if the conflict widens and interrupts oil shipments from the Middle East. No matter how the fighting unfolds, it promises to increase prices at American gasoline pumps just as voters' natural gas and electricity bills are already set to rise. And it comes at a time when Trump may have fewer tools at his disposal than Biden did to blunt their impact. Gasoline prices could jump as much as 25 cents a gallon in the coming weeks because of the fighting, predicted Patrick De Haan, a gasoline market analyst at the pricing website Regular gasoline prices averaged $3.13 a gallon Friday. Trump, who campaigned heavily last year on cutting energy prices, has started complaining publicly about the global markets not comporting with his priorities. During a bill signing ceremony Wednesday, Trump chided Energy Secretary Chris Wright over this week's rise in oil prices, which had begun climbing amid news of a possibly imminent Israeli attack. 'I was going to call and really start screaming at you,' Trump told Wright. Every White House knows that presidents of either party suffer when higher gasoline prices beset voters. And Trump could be particularly vulnerable if a significant rise in fuel prices triggers the sort of economic slowdown that analysts have warned his tariffs could bring. 'Geopolitical price spikes pose a bigger risk of recession than inflation in my view,' said Bob McNally, who heads the energy and geopolitical analysis firm Rapidan Energy and served on the National Security Council and National Economic Council during the George W. Bush administration. 'The White House should be worried.' Trump still has headroom for any rise in pump prices resulting from the Israel attack. Friday's average gasoline price was down 33 cents from a year ago and $1.88 from their all-time high in June 2022, according to AAA. But if the fighting spreads, things could get politically hot for Trump quickly. If Israel targets Iran's oil fields or export facilities, prices could rise another $7.50 a barrel, said Andy Lipow, head of the market analysis firm Lipow Oil Associates. If Iran then attacks the Strait of Hormuz at the mouth of the Persian Gulf — a major waterway for oil exports out of the Middle East — 'we could see $100 oil,' Lipow said. 'Iran knows full well that President Trump is focused on lower energy prices,' Lipow said in an email. 'Actions by Iran that impact Middle Eastern oil supplies raising gasoline and diesel prices for Americans are politically damaging to the president.' Worryingly for the White House, Trump can do little to tamp down prices. The president's only real option include using his bully pulpit and diplomats to try to persuade Israel and Iran to quell the fighting soon. He could also tell Wright to release oil from the Strategic Petroleum Reserve, hoping that unleashing a gusher of crude into the global markets will keep the price under control. Biden took that step in a big way after Russia's Ukraine invasion, selling off more than 40 percent of the stockpile in a move that Republicans blasted as a politically minded misuse of a reserve meant for national emergencies. But the reserve is still considerably smaller than it was pre-Biden, leaving Trump with less oil to release without depleting it. The reserve had 402 million barrels as of last week, down from 626 million barrels four years ago. A DOE spokesperson maintained that the administration was lowering prices by cutting regulations. 'While oil prices are dictated by supply and demand, the Trump administration is reducing regulatory costs and removing red tape holding back energy production, delivering lower energy costs for the American people,' Andrea Woods said in an email. Before this week, oil prices had fallen nearly $20 a barrel below where they were when Trump reentered the White House Jan. 20 — though the biggest drop came after Trump announced his 'Liberation Day' tariffs in early April, which triggered fears of a worldwide economic slowdown and threw energy demand into doubt. The oil producing countries in OPEC also boosted their own output earlier this year, further lessening prices — until now. At the moment, the hike in oil prices seems to have stalled, said Tamas Varga, an analyst at the brokerage firm PVM Oil Associates, and they could come back down if the fighting settles. 'Given that the situation is fluid it would not be surprising to see prices remain stable ahead of the weekend,' Varga said in an email. 'Next Monday, however, there is a chance of a significant retracement provided the situation is contained. If there is no tangible supply shock, the current rally will not be maintained.' The low prices the White House started with may help blunt voter's anger at rising prices, said Kevin Book, director at analyst firm ClearView Energy. But that doesn't mean Trump can be complacent, given his campaign promises. 'Politically, that offers Trump some headroom,' Book said. 'But, of course, Trump didn't campaign on keeping energy costs the same. He campaigned on bringing them down.'
