The Strait of Hormuz is the most important tanker transport route for global crude oil exports. Iran’s atomic program may trigger further sanctions and even military action from either Israel or the US. The Iranians won’t try to close the Strait of Hormuz as retaliation for EU sanctions because this would hurt Iran´s economy.
The importance of the Strait of Hormuz for global oil trade
Oil production from the Gulf countries equals roughly 29 percent of global crude oil production. Just to get a feeling for the market: When Libya´s oil production declined, which was just two percent of global production, the price of Brent increased by $20.
The pundits expect oil prices beyond $150 (some even suggest $200) if the Strait of Hormuz is closed. This is of course a serious issue for all oil speculators as what happens there can have an enormous impact; and certainly, the political situation has further deteriorated. A confrontation seems to be more likely now Continue reading