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Time of India
24-06-2025
- Business
- Time of India
Oil prices fall to $70 as Iran's missile strike signals possible de-escalation; Strait of Hormuz disruption risk persists
New Delhi: Global oil prices declined to $70 per barrel following Iran's retaliatory strike against the United States, which analysts see as a potential de-escalation move amid continuing geopolitical tensions in West Asia. According to Rystad Energy, Brent crude rose to nearly $78 per barrel after Israel's Operation Rising Lion on June 13, targeting over 100 Iranian nuclear and military facilities. It later stabilised at $75 before falling to $70 following Iran's missile response targeting Doha. 'The geopolitical risks that have loomed over the Middle East for months have now fully materialised, prompting a rapid repricing in the oil market,' said Janiv Shah, Vice President, Oil Markets Analysis, Rystad Energy. Rystad warned that market volatility would remain high in the short term until the extent of the damage and Iran's subsequent response become clearer. A potential disruption of the Strait of Hormuz , through which about 15 million barrels per day (bpd) or nearly a third of global seaborne crude exports transit, poses a significant risk to energy markets . Asia, which receives nearly 80 per cent of these flows, would be most affected, the report said. Iran's Parliament has passed a motion authorising the potential closure of the Strait, though the decision rests with the Supreme National Security Council. Rystad said a complete blockade remains unlikely at this stage, but any perceived threat is likely to raise insurance costs and operational risk premiums. In the gas segment, Lu Ming Pang, Senior Analyst, Gas & LNG Research, Rystad Energy, said around 20 per cent of global liquefied natural gas (LNG) exports pass through the Strait. Countries including India (66 per cent), Bangladesh (69.2 per cent), China (34 per cent), Thailand (21 per cent), South Korea (16 per cent), and Japan (5.61 per cent) depend significantly on Qatari and UAE LNG, which transit through Hormuz. 'Should there be a disruption in supply, these buyers will have to seek additional volumes from other suppliers, which will drive up the price of spot LNG,' Pang said. He added that Qatari contracts and deliveries generally have limited flexibility, and disruptions are more likely to cause delays than outright cancellations unless Force Majeure is invoked. Claudio Galimberti, Chief Economist, Rystad Energy, said that Iran's missile strike may be perceived as a de-escalation attempt, which has led to a softening in oil prices. However, two possible scenarios are being monitored by market participants. In the first scenario, the strikes may have destroyed Iran's nuclear stockpile, which could open the way to diplomatic engagement and reduce risks to oil and gas infrastructure. In the second, Iran may have protected its key assets, potentially resulting in further military action by the US and Israel. 'In the second scenario, the likelihood of a broader and more prolonged conflict increases,' Galimberti said. Rystad noted that shipping disruptions are already visible, with GPS jamming, cyber interference, and rising insurance premiums being reported. Container and dry bulk traffic have declined, though tanker flows have increased as Iran ramps up exports ahead of further escalation. The Strait of Hormuz remains a critical chokepoint, and any disruption could impact global energy flows. According to Rystad, the waterway's strategic significance means that a full closure would require significant effort and coordination and would likely trigger international responses, including from China, Iran's largest crude customer. OPEC+ is expected to monitor the situation. Saudi Energy Minister Prince Abdulaziz bin Salman said the group would 'only react to realities, not hypotheticals,' in response to questions on supply adjustments. Rystad Energy stated that while oil and gas markets have currently priced in a de-escalation signal, the evolving situation will continue to affect prices as long as the geopolitical risk remains elevated.
Yahoo
23-06-2025
- Business
- Yahoo
Military bases or vital waterway: Iran weighs response to US strikes
Iran has vowed to retaliate for US air strikes on its nuclear facilities, and has two main options: attacking American forces in the region, and closing the strategic Strait of Hormuz. An advisor to Iran's supreme leader issued a warning on Sunday, saying any US base in the region that takes part in attacks is a "legitimate target". Disrupting traffic through the narrow Strait of Hormuz, a vital route for oil and gas, would send energy prices soaring in a global inflationary shock. Closing the waterway would be "extremely dangerous", Kaja Kallas, the European Union's top diplomat, said on Monday. AFP looks at the two scenarios and their possible implications. - Strait of Hormuz - The narrow, U-shaped seaway snaking between Iran and the Arabian Peninsula is the gateway for Gulf energy shipments to global markets, carrying one-fifth of the world's oil and liquefied natural gas exports. Closing the 50-kilometre (30-mile) wide channel could spike oil to $120 a barrel, according to Deutsche Bank research, raising prices of transport, food and utilities around the world. "It's in the best interest of all Middle Eastern countries to keep the Strait of Hormuz open and prevent any supply disruption," Rystad Energy senior analyst Lu Ming Pang wrote last week. Currently, traders do not appear too concerned. Brent crude was trading at $76 on Monday, marginally changed from Friday's close. "Looking at the oil price this morning, it is clear that the oil market doesn't assign a very high probability of (a closure) happening," said Bjarne Schieldrop, chief commodities analyst at SEB bank. The big question is whether Iran is prepared to detonate this economic hand-grenade. Despite threats in the past, including in 2011 as oil sanctions loomed, it has not pulled the pin. According to a senior European official, the Iranians do not have the means to block the strait "long-term", but they could hamper shipping. But "it would be a form of suicide to do that," the official said. "The effect on Israel would be close to zero, the effect on themselves immense, as well as on the United States, Europe and China." Iranian forces have nearly 200 fast patrol boats that can fire anti-ship missiles or torpedoes, plus mine-laying vessels, according to the International Institute for Strategic Studies. But the US Fifth Fleet, a major naval force, is stationed across the Gulf in Bahrain, and Iran remains under daily fire from Israeli warplanes and drones. Iran's own energy exports, in spite of sanctions, remain an important source of income for the world's ninth-biggest oil-producing country. - US bases - With United States military bases spread around the Gulf countries to Iran's west, there is no shortage of potential targets. Kuwait, in a legacy of the 1990 Gulf war, houses about 13,500 US forces, while the biggest US base in the region is Al Udeid in Qatar. The US Fifth Fleet, covering the Gulf, Red Sea and parts of the Indian Ocean, is based in Bahrain, and about 3,500 US personnel are stationed at Al Dhafra Air Base in the United Arab Emirates. In Iraq, US troops are deployed in various installations, including the Al-Asad and Arbil air bases, as part of an anti-jihadist coalition. Iran-backed Iraqi armed factions have threatened Washington's interests should it join Israel's campaign, having targeted them in previous years. Increased US involvement in the Iran-Israel war risks attacks "on US interests, US bases and such across the region", said Renad Mansour, senior research fellow at Chatham House. "The US attack on Iran has now meant that this war is between Israel, the United States and Iran, which means that across the region, Iran may seek to target the US," he added. However, this option is also fraught for Iran as it risks isolating itself from the powerful Gulf monarchies that enjoy good relations with Washington. "Tehran is unlikely to strike Gulf Arab states," said Andreas Krieg, a senior lecturer at King's College London. "Even as it sees the UAE and Saudi Arabia as quiet enablers of the US-Israeli axis, Iran understands that any attack on their soil would likely unify them against it and open the door for greater American military presence. "Instead, Iran may issue veiled warnings to these states, use regional proxies to pressure them, or engage in cyber or intelligence disruptions targeting their interests -- maintaining plausible deniability while raising the cost of involvement." th-rh/ami/jsa
Int'l Business Times
23-06-2025
- Business
- Int'l Business Times
Military Bases Or Vital Waterway: Iran Weighs Response To US Strikes
Iran has vowed to retaliate for US air strikes on its nuclear facilities, and has two main options: attacking American forces in the region, and closing the strategic Strait of Hormuz. An advisor to Iran's supreme leader issued a warning on Sunday, saying any US base in the region that takes part in attacks was a "legitimate target". Disrupting traffic through the narrow Strait of Hormuz, a vital route for oil and gas, would send energy prices soaring in a global inflationary shock. Closing the waterway would be "extremely dangerous," Kaja Kallas, the European Union's top diplomat, said on Monday. AFP looks at the two scenarios and their possible implications. The narrow, U-shaped seaway snaking between Iran and the Arabian Peninsula is the gateway for Gulf energy shipments to global markets, carrying one-fifth of the world's oil and liquefied natural gas exports. Closing the 50-kilometre (30-mile) wide channel could spike oil to $120 a barrel, according to Deutsche Bank research, raising prices of transport, food and utilities around the world. "It's in the best interest of all Middle Eastern countries to keep the Strait of Hormuz open and prevent any supply disruption," Rystad Energy senior analyst Lu Ming Pang wrote last week. Currently, traders do not appear too concerned. Brent crude was trading at $76 on Monday, little changed from Friday's close. "Looking at the oil price this morning, it is clear that the oil market doesn't assign a very high probability of (a closure) happening," said Bjarne Schieldrop, chief commodities analyst at SEB bank. The big question is whether Iran is prepared to detonate this economic hand-grenade. Despite threats in the past, including in 2011 as oil sanctions loomed, it has not pulled the pin. According to a senior European official, the Iranians do not have the means to block the strait "long-term", but they could hamper shipping. But "it would be a form of suicide to do that," the official said. "The effect on Israel would be close to zero, the effect on themselves immense, as well as on the United States, Europe and China." Iranian forces have nearly 200 fast patrol boats that can fire anti-ship missiles or torpedoes, plus mine-laying vessels, according to the International Institute for Strategic Studies. But the US Fifth Fleet, a major naval force, is stationed across the Gulf in Bahrain, and Iran remains under daily fire from Israeli warplanes and drones. Iran's own energy exports, in spite of sanctions, remain an important source of income for the world's ninth-biggest oil-producing country. With United States military bases spread around the Gulf countries to Iran's west, there is no shortage of potential targets. Kuwait, in a legacy of the 1990 Gulf war, houses about 13,500 US forces, while the biggest US base in the region is Al Udeid in Qatar. The US Fifth Fleet, covering the Gulf, Red Sea and parts of the Indian Ocean, is based in Bahrain, and about 3,500 US personnel are stationed at Al Dhafra Air Base in the United Arab Emirates. Increased US involvement in the Iran-Israel war risks attacks "on US interests, US bases and such across the region", said Renad Mansour, senior research fellow at Chatham House. "The US attack on Iran has now meant that this war is between Israel, the United States and Iran, which means that across the region, Iran may seek to target the US," he added. However, this option is also fraught for Iran as it risks isolating itself from the powerful Gulf monarchies that enjoy good relations with Washington. "Tehran is unlikely to strike Gulf Arab states," said Andreas Krieg, a senior lecturer at King's College London. "Even as it sees the UAE and Saudi Arabia as quiet enablers of the US-Israeli axis, Iran understands that any attack on their soil would likely unify them against it and open the door for greater American military presence. "Instead, Iran may issue veiled warnings to these states, use regional proxies to pressure them, or engage in cyber or intelligence disruptions targeting their interests -- maintaining plausible deniability while raising the cost of involvement." Infographic with map of the Strait of Hormuz showing the width, the water depth, the refineries and the liquified natural gas terminals in the area AFP Qatar's Emir Sheikh Tamim bin Hamad al-Thani and US President Donald Trump at the Al Udeid air base, the largest US military facility in the region AFP A handout picture provided by the Iranian Army media office shows army chief Amir Hatami (L) at his war command room AFP
France 24
23-06-2025
- Business
- France 24
Military bases or vital waterway: Iran weighs response to US strikes
An advisor to Iran's supreme leader issued a warning on Sunday, saying any US base in the region that takes part in attacks was a "legitimate target". Disrupting traffic through the narrow Strait of Hormuz, a vital route for oil and gas, would send energy prices soaring in a global inflationary shock. Closing the waterway would be "extremely dangerous," Kaja Kallas, the European Union's top diplomat, said on Monday. AFP looks at the two scenarios and their possible implications. Strait of Hormuz The narrow, U-shaped seaway snaking between Iran and the Arabian Peninsula is the gateway for Gulf energy shipments to global markets, carrying one-fifth of the world's oil and liquefied natural gas exports. Closing the 50-kilometre (30-mile) wide channel could spike oil to $120 a barrel, according to Deutsche Bank research, raising prices of transport, food and utilities around the world. "It's in the best interest of all Middle Eastern countries to keep the Strait of Hormuz open and prevent any supply disruption," Rystad Energy senior analyst Lu Ming Pang wrote last week. Currently, traders do not appear too concerned. Brent crude was trading at $76 on Monday, little changed from Friday's close. "Looking at the oil price this morning, it is clear that the oil market doesn't assign a very high probability of (a closure) happening," said Bjarne Schieldrop, chief commodities analyst at SEB bank. The big question is whether Iran is prepared to detonate this economic hand-grenade. Despite threats in the past, including in 2011 as oil sanctions loomed, it has not pulled the pin. According to a senior European official, the Iranians do not have the means to block the strait "long-term", but they could hamper shipping. But "it would be a form of suicide to do that," the official said. "The effect on Israel would be close to zero, the effect on themselves immense, as well as on the United States, Europe and China." Iranian forces have nearly 200 fast patrol boats that can fire anti-ship missiles or torpedoes, plus mine-laying vessels, according to the International Institute for Strategic Studies. But the US Fifth Fleet, a major naval force, is stationed across the Gulf in Bahrain, and Iran remains under daily fire from Israeli warplanes and drones. Iran's own energy exports, in spite of sanctions, remain an important source of income for the world's ninth-biggest oil-producing country. US bases With United States military bases spread around the Gulf countries to Iran's west, there is no shortage of potential targets. Kuwait, in a legacy of the 1990 Gulf war, houses about 13,500 US forces, while the biggest US base in the region is Al Udeid in Qatar. The US Fifth Fleet, covering the Gulf, Red Sea and parts of the Indian Ocean, is based in Bahrain, and about 3,500 US personnel are stationed at Al Dhafra Air Base in the United Arab Emirates. Increased US involvement in the Iran-Israel war risks attacks "on US interests, US bases and such across the region", said Renad Mansour, senior research fellow at Chatham House. "The US attack on Iran has now meant that this war is between Israel, the United States and Iran, which means that across the region, Iran may seek to target the US," he added. However, this option is also fraught for Iran as it risks isolating itself from the powerful Gulf monarchies that enjoy good relations with Washington. "Tehran is unlikely to strike Gulf Arab states," said Andreas Krieg, a senior lecturer at King's College London. "Even as it sees the UAE and Saudi Arabia as quiet enablers of the US-Israeli axis, Iran understands that any attack on their soil would likely unify them against it and open the door for greater American military presence. "Instead, Iran may issue veiled warnings to these states, use regional proxies to pressure them, or engage in cyber or intelligence disruptions targeting their interests -- maintaining plausible deniability while raising the cost of involvement."
