Oil prices climb after fresh U.S.-Iran strikes
Brent and West Texas Intermediate crude each jumped about 3% Thursday after U.S. forces struck an Iranian drone operation near the Strait of Hormuz and Iran said it targeted a U.S. airbase. The strikes renewed fears of disruptions to commercial shipping through the Strait of Hormuz, pushing stocks lower and bond yields higher as markets priced tighter oil supply. Higher crude threatens to raise gasoline and shipping costs worldwide, adding inflationary pressure for consumers and complicating economic outlooks.
Some Strait of Hormuz self reflection. If you’d told me in, say, early to mid March, that the Strait would still be mostly closed at the end of May I’d have expected oil prices well north of $150 and evidence of physical shortages and disruption in Europe and developed Asia by now. 1/3
Duncan Weldon62Obviously this still might happen, but much later than I expected. Turns out: a combination of pre-closure stockpiles & inventories, some smart substitution & some precautionary demand reduction has a delayed the acute crisis and we *might* even avoid it. 2/3
Kathryn 8This does explain why the government was clearly not panicking, companies had obviously been telling them that they had it in hand. It's ok for us as a G7 country though, less good for poorer countries.
