Oil Prices Soar as US-Iran Tensions Escalate
Oil prices surged above $90 per barrel after US forces struck Iranian missile launchers in the Strait of Hormuz, exacerbating tensions between the two countries.
The week started with a bang as Iran attacked US forces in Jordan, and President Trump's statement that Kharg Island, Iran's main oil terminal, was being 'blown to smithereens' added to the chaos. However, there was no confirmation of this from the military.
Iran has been trying to lay naval mines in the strait, a challenge to the US military which claimed last week that it had cleared the main passage for shipping. This suggests that Iran can continue to disrupt shipping routes regularly and from anywhere on the shore, putting pressure on equity markets.
The Brent crude price quickly climbed 2.4% after the strikes, while Goldman Sachs estimates that Gulf oil exports have reached 15-16 million barrels per day, two-thirds of pre-conflict volumes.