LONDON, June 16. /TASS/. Leading global powers will not be served if the conflict between Iran and Israel drags on, so the fighting is likely to stop before it gets out of control and completely upends established trade routes, Janiv Shah, Vice President of Commodities Markets – Oil at Rystad Energy told TASS in a comment.
“Potential closure of the Strait of Hormuz risks tipping oil markets into heavy undersupply, supporting prices and adding tension. Given its interest in keeping prices closer to $50 [per barrel], the US could play a stabilizing role. So far, the Strait, the most critical oil transit route, has not been targeted. A blockade remains the key risk that could push markets into uncharted territory. We maintain our view that this is likely to remain a short-lived conflict, as further escalation risks spiraling beyond the control of key stakeholders,” he said.
“How the unfolding military and humanitarian crisis between Israel and Iran evolves hinges on the responses of the US, EU, Russia, and China, as well as developments on the ground,” added Mukesh Sahdev, the Global Head of Commodities Markets – Oil at Rystad Energy.
“Oil markets are heading into a peak demand period in the US and will be looking for signs of stabilization rather than further escalation. For now, the conflict appears likely to be contained, with the US potentially playing a central role, alongside significant diplomatic efforts from key players in the Middle East,” the analyst noted.
“There are also indications that Iran may be nearing a deal. Based on our earlier disruption simulations, we see oil prices capped below $80 per barrel,” he added.