Iran-US Conflict Disrupts Oil Shipments Through Strait of Hormuz
The ongoing conflict between Iran and the US is following a familiar pattern, according to J.P. Morgan commodities strategist Natasha Kaneva. The bank describes this cycle as 'Escalate. Negotiate. Violate. Repeat.' The current crisis has led to a significant disruption in oil shipments through the Strait of Hormuz, with confirmed flows falling to 5.1 million barrels per day from 12.5 million barrels per day just one week earlier.
The Iran-backed Houthis launched missiles at Saudi Arabia, increasing the risk that the fighting could spread across the region. The US has restored sanctions on Iranian oil exports and resumed a blockade of Iranian ports in response to Iran's attacks on commercial ships near the Omani coast.
J.P. Morgan notes that the market for refined fuels is weakening faster than the crude oil market. Persian Gulf exports of diesel, gasoline, jet fuel, fuel oil, naphtha, and other products had temporarily recovered to about 1.9 million barrels per day but have now fallen again to roughly 1.2 million barrels per day.