Geopolitical Risk & Oil Supply - The Strait of Hormuz is a critical chokepoint for global oil supply, with approximately 20% of the world's oil flowing through it [1] - A material disruption in the Strait of Hormuz would significantly impact global oil supply [1] - Iran has the potential to disrupt or restrict oil supply through the Strait of Hormuz, even without a full closure [2][3] Potential Impact on Oil & Fuel Prices - Any restriction or anxiety regarding oil supply through the Strait of Hormuz could significantly affect oil prices [3] - Increased oil prices would likely translate to higher fuel prices for consumers [3] Iran's Options for Disruption - Iran could harass shipping or direct ships into its territorial waters as a means of disruption [2] - A complete closure of the Strait of Hormuz by Iran would be difficult to sustain for a long period, potentially upsetting allies like China [2]

The straight of Hormuz is a narrow stretch of water that links the Persian Gulf to the rest of the world. About a fifth of the world's oil flows through it. That's the world's produced oil, the world's consumed oil.It has to go through that waterway. It's largely unavoidable. And so any kind of material disruption would be a big issue.Iran has always said that it could close the straits if threatened, if the situation demanded it. It would be very difficult for Iran to do that and certainly very difficult f ...

Group 1: Market Supply and Demand - ExxonMobil CEO Darren Woods stated that there is sufficient supply in the global oil market to handle any disruptions to Iranian exports, emphasizing that the main concern is the potential impact on infrastructure and shipping through the Strait of Hormuz [1] - Iran produces 3.3 million barrels per day of crude oil and exports approximately 1.6 million barrels per day, which constitutes less than 2% of total global demand [3] - The Strait of Hormuz is a critical chokepoint, with an average of 20 million barrels per day flowing through it in 2024, representing about 20% of global petroleum liquids consumption [4] Group 2: Price Movements - Oil prices surged following Israeli strikes on Iran's nuclear facilities, with U.S. West Texas Intermediate prices reaching $72 per barrel due to concerns over potential disruptions to Iranian energy supplies [5] - Although the loss of Iranian oil could increase prices by up to $7.50 per barrel, significant disruptions through the Strait of Hormuz could push prices to $100 [7] - Prices began to stabilize as it was reported that export capacity remained intact despite the attacks [7] Group 3: Infrastructure and Capacity - Iran has 11 refineries with a total refining capacity of 2.5 million barrels per day, while Israel has two refineries with a combined capacity of 300,000 barrels per day [9][11] - The Shahr Rey Refinery in Iran, targeted by Israeli missiles, has a capacity of 225,000 barrels per day, indicating the scale of potential impacts on refining capabilities [8]

Energy Market Impact of Geopolitical Events - Rising oil prices will likely lead to increased gasoline prices [2] - The market is assessing whether the current rally in crude oil prices will escalate further [3] - The energy sector and commodities could be viewed as an insurance against geopolitical risks, but the timing of buying this insurance is uncertain [4] - A dramatic escalation is viewed as unlikely, as maintaining energy market flow is in the best interest of developed countries, Israel, and even Iran [5] - The probability of a supply disruption is not currently high, though risks exist [8] Investment Strategies - Investors who previously abandoned the energy sector are now considering their options regarding crude oil [2] - It may be too early to sell or short positions given the uncertainty heading into the weekend [7] - If there is escalation without infrastructure damage, the market may soften next week [6] - It might not be advisable to buy insurance (energy sector investments) ahead of the weekend, pending potential escalation [6] Geopolitical Considerations - The US might intervene to improve the situation [1] - President Trump may use the current situation to pressure Iran to renegotiate the nuclear deal [9] - Iran may consider advancing its nuclear program, weighing its options in the current environment [9][10]

In the sea of red, energy is the only sector uh on top today with oil prices moving sharply higher on the heels of of Israel's air strikes against Iran. Crude's still up about 7%. Pipa Stevens has a closer look at Iran's energy complex and why the state of Hormuz Pipa is going to be key here.So Kelly, oil's next move really depends here on how Iran responds to the attacks. Now the country itself is not a major supplier. They export about 1.7% million barrels per day with more than 90% of those exports comin ...