Leading market analysts have indicated that the ongoing conflict involving Iran has effectively blocked the Strait of Hormuz, causing the most severe disruption to crude oil supplies in history—an impact not yet fully reflected in current oil prices. Saad Rahim, Chief Economist at Trafigura Group, stated at a global commodities summit on Tuesday that the conflict has already disrupted 1 billion barrels of crude oil supply. Should the conflict persist, this figure could rise to 1.5 billion barrels. Frederic Lasserre, Head of Analysis at commodities trader Gunvor Group, warned that if the conflict continues for another month, the oil market could face a scenario where inventories are completely depleted. Since the outbreak of the Iran conflict, Brent crude futures have experienced significant volatility, briefly surging to nearly $120 per barrel before retreating on expectations of peace talks. On Tuesday, Brent crude traded around $95 per barrel, partly due to market optimism that the conflict may soon conclude. Rahim of Trafigura remarked, "The market clearly has yet to fully grasp the severity of this supply shock." He added that even if a peace agreement is reached, restoring normal crude flows will take time, creating a clear disconnect between current market expectations and reality. Amrita Sen, Co-founder and Research Director of Energy Aspects, speaking at the same forum, suggested that crude shipments through the Strait of Hormuz may never return to pre-conflict levels. She also projected that the conflict could result in the loss of approximately 450 million barrels of refined products, including gasoline, based on the assumption that the Strait of Hormuz will resume 50% of its traffic next month.
Comments