Hormuz Strait Closure Sparks Global Oil Price Surge
Escalating tensions between the US, Israel, and Iran have led to the closure of the Strait of Hormuz, disrupting traffic through this critical shipping lane that carries nearly 20% of the world's oil and LNG exports. As a result, global oil prices have surged in recent sessions, with spot Brent Crude prices jumping over 16% in the past three days.
Goldman Sachs estimates that crude oil could rise by around $15 per barrel if shipments are disrupted for a full month. The firm also expects Dutch TTF gas prices to climb towards €74 MWh if LNG flows are fully halted for one month, and European gas prices could push above €100 MWh in case of longer disruptions.
The bank's analysts warn that traders are demanding an additional $14 per barrel as a premium to account for elevated risks due to the conflict. A partial disruption would have smaller effects, with a 50% closure adding around $4 per barrel and a 25% disruption increasing prices by about $1.