The U.S. threat to blockade the Strait of Hormuz could further escalate the
Middle East conflict, says Vivek Dhar of Commonwealth Bank of Australia.
He notes the move would directly threaten Iran’s oil exports via the strait,
which were around 1.7 million barrels per day last month, tightening already
constrained oil and refined product markets.
Dhar adds that physical oil scarcity is pushing delivery-linked benchmarks
sharply higher, with prices in some cases trading above $140 a barrel in the
coming weeks.
