Hormuz blockade may deepen supply disruption but oil spike should remain temporary – Julius Baer
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The US blockade of Iranian ports is expected to intensify disruption to Middle East energy supplies, but the resulting spike in oil and gas prices should remain temporary. According to Julius Baer, a lasting shock to the global economy would require major damage to oil and gas infrastructure across the region.
The US has launched a blockade of Iranian ports, redirecting shipping traffic away from Iranian-controlled waters in the Strait of Hormuz. This move is intended to curtail Iranian oil exports and re-establish the freedom of trade. The blockade is expected to tighten supply and increase oil prices in the short term. However, Julius Baer believes that the impact on global supply has been partly offset by alternative export routes and resilient energy infrastructure. Onshore oil inventories remain stable, despite some declines in refined products in Asia. The blockade is part of the broader negotiating process between the US and Iran.
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