Iran’s control over the price of US gasoline with the Strait of Hormuz/The worried view of oil companies towards the Persian Gulf

According to the exclusive report of Energy Press; In recent days, the level of tension between Iran and Israel has reached an unprecedented level due to the assassination of Martyr Haniyeh in Tehran, and according to experts, there is a possibility of war between Iran and this regime at any moment. But in the meantime, one of the important issues is the impact of this possible war on the energy market, especially on oil, because a large part of the world’s oil exports pass through the Strait of Hormuz, and one of Iran’s scenarios against Western pressure and terror is always to close this waterway. It is vital for the world economy.
Increasing tension in the Strait of Hormuz
The Strait of Hormuz, which is controlled by Iran, is of significant strategic importance as one of the world’s most important maritime checkpoints. This passage, which is among the top five vital passages in the world, connects the Persian Gulf to the Oman Sea and the Indian Ocean. Due to its geological features, the passage of heavy oil tankers has changed over the years. However, Iran’s control over this checkpoint for the transportation of oil and energy has caused particular concern to the West amid geopolitical tensions. Therefore, the Iranian government’s foreign policies and actions in the region have always raised questions about the security of oil supply through this strait. Of course, due to the potential impact on global markets, alternatives are being considered to reduce risks and ensure energy supply.
So any tension near the Strait of Hormuz, a vital oil shipping route, has raised concerns about possible disruptions in global oil trade. The tension between Iran and the Zionist regime and the United States escalated after Haniyeh’s martyrdom in Tehran. This situation underscores the importance of the Strait of Hormuz and the potential for conflict in the region, with implications for global energy security and stability.
The reason for the concern of the oil market
So far, however, energy markets have been relatively calm, as supply and transit were not at risk, with ample reserves and OPEC+ (led by Saudi Arabia) excess capacity accessible. But this trend can quickly change, so that this has caused great concern for energy market activists.
Oil markets are now likely to focus on the level of escalation/de-escalation between Israel and Iran (and more broadly in the region) and whether supply will ultimately be affected. So far, the markets have not experienced any disruption, even in the October 7 attacks. However, demand outstripped supply for the first few months of the year, causing a shift in fundamentals that ultimately pushed prices to around $85 a barrel, even without geopolitical tensions.
But the main focus of the region is on any possible blockage in the Strait of Hormuz, as Iran previously seized a ship linked to Israel before the attacks on Hamza Sadegh. Approximately 13 million barrels per day (b/d) of oil reserves (and refined products) are transported through this waterway, including nearly 1.5 million barrels of Iran’s own exports. Any impact on the trend of these supplies will certainly push oil prices above $100 per barrel, although the increase and duration will depend on the severity of the disruption in the Strait of Hormuz. Of course, several million barrels of oil from Saudi Arabia and the United Arab Emirates may be diverted daily, but without a doubt, half or more of these barrels can be removed from the world markets without access to the strait.
These geopolitical concerns come as seasonal factors are expected to boost demand by at least 1 million barrels per day over the coming months and OPEC+ will maintain supply cuts. The OPEC+ group has excess capacity of at least 5 million barrels per day, and according to some estimates, up to 6 million barrels per day. But if supply through the Strait of Hormuz is disrupted, much of this excess capacity may not be able to reach the market or be sufficient to compensate for the loss of supply, ultimately creating more upside risk for oil prices. In addition, some members of the OPEC+ group may need time to increase their capacity. All of these factors have the potential to push prices above $100 per barrel for some time.