Opinion: What deadly Middle Eastern attacks on U.S. troops, Russian tanker mean for global oil market

The White House blamed Iranian-backed militias for the assault on U.S. soldiers, which was denied by Tehran, while Houthi rebels claimed responsibility for the attack on the ship. Here’s what five oil analysts say about the outlook and impact on the oil market:

Mizuho Bank Ltd. The oil market “has been exposed to a buffet of supply-side risks,” said Vishnu Varathan, a chief economist for Asia ex-Japan at the bank. “It does appear that even with any softening we’re seeing to demand, geopolitics is shaping up so that oil prices could have more upside risk in them.”

Sanford C. Bernstein. “The biggest wildcard is whether the U.S. and allies decide to take a more forceful action on Iran, where crude exports have increased to 1.5 MMbpd,” said Neil Beveridge, a senior analyst based in Hong Kong. “Any re-tightening of sanctions could bring about upward pressure on oil prices.”

Rapidan Energy Group. The attack on U.S. troops in Jordan is a “material move up the escalation ladder that should cause the oil market to build in another couple of dollars per bbl of Iran contagion risk,” said Bob McNally, president and founder of the company, and a former White House official.

Vanda Insights. “The question is, why have we not seen Brent shoot up toward $90 or higher?” said Vandana Hari, the Singapore-based founder of the company. “There would need to be a direct hit on a Middle Eastern oil cargo or oil production infrastructure for prices to skyrocket.”

Global benchmark Brent crude jumped as much as 1.5% in early Asian trading before paring most of those gains to trade near $84 a bbl.

Again Capital LLC. “None of the actors want a full-blown war,” said John Kilduff, founding partner of the company. “The oil is still flowing, no oil fields have come in the crosshairs and we’re still seeing vessels going through into the Suez Canal. If there are any signs of tensions easing,” prices will pull back, he added.




Source: Worldoil

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