The recent escalation of tensions between Israel and Iran has caused a stir, but it has had minimal impact on the oil market. Despite Iran’s increased exports, the conflict has not significantly affected supply. Market analysts believe that all parties involved are not interested in prolonging the conflict and that the attacks were primarily to avoid appearing weak.
Increasingly, political risk in the region is factored into rising oil prices. While tensions have escalated, oil supply has not been significantly affected. Iran’s ability to bypass sanctions and increase exports is attributed to advancements in their fleet of oil tankers. The expansion of their tanker fleet and creative methods to circumvent sanctions have allowed Iran to boost its oil exports.
Despite new US and EU sanctions against Iran, the absence of the word “oil” indicates a focus on limiting revenue without major disruptions in oil supply. The discussion around imposing stricter sanctions continues, but targeting Chinese financial institutions poses risks to the delicate US-China relationship.
The increase in floating oil storage highlights Iran’s capability to meet demand, especially in China, despite geographical limitations. With Iranian oil likely lower than world market prices due to its quality and constraints, the discussion around sanctions and their effectiveness remains ongoing. Overall, this complex situation underscores the challenges facing global oil markets today.