Post #580

Iran's Role in the Oil World: What Will Happen to Gasoline Prices Worldwide After the Strikes ❗️ Earlier today US President Donald Trump ordered strikes on Iran, escalating the standoff into an all-out military conflict, after he failed nuclear talks. Given Iran's major role in oil production, there's even more to it than violation of international law and flouting of someone else's sovereignty, to which everyone is accustomed now. So, let's get it sorted out. 1️⃣ Iran's economy is about oil and gas. Under strict sanctions, Iran still pumps about 3.3 million barrels a day — two times twice as much as Nigeria — which is equal to 3-4% of global oil supplies. It exports 90% of its crude via Kharg Island, for shipping through the narrow Strait of Hormuz to China. 2️⃣The Strait of Hormuz itself is another important factor. It handles about a quarter of the world’s seaborne oil trade and some 20% of the trade in oil. Besides, it is the only sea route for the Gulf monarchies' exports. The shallow depth of the waterway makes ships vulnerable to mines, while the proximity of the strait to the Iranian land leaves vessels open to attack from shore-based missiles or interception by patrol boats and helicopters. The Iranian government has threatened during previous periods of geopolitical tension to block the strait — however, it has never followed through on its threats yet. ⁉️ The repercussions of today's strikes depend on the severity and duration of the new round of conflict. If the escalation remains limited, leaving shipping and exports intact, oil would likely spike briefly and then stabilize If any of the sides set about consistently targeting oil infrastructure, the increase in oil prices will be serious and long-lasting. One of Goldman Sachs's leading analysts predicted last week that it would lead to an $8 per barrel price increase. ➡️ Stay informed - @devilsbelow