After U.S. airstrikes on Iran, some oil tankers did U-turns, paused, or avoided spending even a minute longer than necessary when crossing the Strait of Hormuz—the world’s most vital oil flow chokepoint. Iran has hinted that it may block the Strait in retaliation.
At least two supertankers made U-turns at the Strait of Hormuz since the U.S. strikes, vessel-tracking data monitored by Reuters showed on Monday.
Other tankers are waiting outside the Strait before it is absolutely necessary to enter the lane to load oil or LNG.
Greece, which has a huge oil tanker fleet, has already cautioned the ship owners to rethink if they are entering the Gulf. Tankers should “reassess passage” via the Strait of Hormuz until the situation normalizes, and wait at safe ports nearby, according to a circular of the Greek shipping ministry seen by Bloomberg.
The oil market’s biggest fear is the closure of the Strait of Hormuz, through which one-fifth of global daily oil consumption passes.
The EIA estimates that 84% of the crude oil and condensate and 83% of the liquefied natural gas that moved through the Strait of Hormuz went to Asian markets last year.
Analysts acknowledge that if oil flows are disrupted in the Strait, oil prices could easily hit $100 per barrel.
Brent crude could rise all the way to $100 and more, peaking at $110 per barrel in case Iran closes the Strait of Hormuz, Goldman Sachs said in a new note after the U.S. strikes on Iranian nuclear sites this weekend.
The investment bank said this price could materialize if oil flows via the vital chokepoint were cut by half for a month and remained 10% lower than normal over the next 11 months.
Credit: Oilprice.com
