Hormuz Hopes Send Oil Prices Plummeting to $87
Oil prices have slipped to $87 per barrel as hopes grow for the reopening of the Strait of Hormuz, a key oil transit route. This has led to concerns about supply disruptions caused by the Middle East war.
The Strait links major Gulf oil producers with global markets and carries oil and natural gas shipments equivalent to one-fifth of global consumption.
Iran and Oman are working on an agreement to govern the Strait, which could ease tensions over control and revenue sharing. However, Iranian officials have stated that the strait will remain closed unless the US agrees to meet under an interim ceasefire deal reached in June.
JPMorgan estimates that every additional month of disruption could add $7-$8 per barrel to Brent prices, while Goldman Sachs warns that disruptions through the Strait of Hormuz and the Red Sea could lead to Brent reaching $120 per barrel if shipping disruptions persist.