Iranian analyst points to oil price stability despite tensions in Hormuz

BAKU, Azerbaijan, March 16. Oil prices in global markets have not yet reached alarming levels despite restrictions on the passage of oil tankers through the Strait of Hormuz, Iranian international energy analyst Fereydoun Barkeshli said, Trend reports.

Barkeshli wrote in an article for local media that large global reserves and the availability of nearly 3 million barrels of oil beyond production levels have prevented a sharp rise in prices.

According to him, many analysts had predicted that crude oil prices could reach $200 per barrel during the early days of the war between the United States, Israel, and Iran, but significant reserves have so far prevented such a spike.

“Of course, Iran has not yet closed the Strait of Hormuz, but a serious reduction in tanker traffic through the strait is being observed. Perhaps Iran is preparing the groundwork to charge fees for tanker transit in the future,” he noted.

Barkeshli said that about 20 million barrels of oil pass through the Strait of Hormuz each day, mainly heading toward Asian markets such as China, India, Pakistan, and countries that are members of the Association of Southeast Asian Nations (ASEAN). Europe accounts for only a small share of oil shipments from the Persian Gulf.

Under normal conditions, around 40 large oil tankers, dozens of medium-sized tankers, vessels transporting liquefied natural gas from Qatar, as well as ships carrying petroleum products and other cargo, pass through the strait daily. Any disruption along this route could paralyze the global economy.

“The Strait of Hormuz supplies roughly one-fifth of global liquefied petroleum gas (LPG) consumption. The largest volumes of LPG are shipped from Qatar, Oman, and the United Arab Emirates to various destinations. Since the war began on February 28, LPG prices have risen to more than double the level of oil. This could change the global energy mix in the future. Over the past two weeks, LNG production facilities in the region have suffered serious damage, and repairs could take months or even more than a year. Oil refineries have also been damaged, and the production of some products used in the electricity industry has been disrupted,” he said.

Barkeshli warned that the current calm in energy markets may only signal a much larger upheaval ahead.

“This turbulence could emerge in the Persian Gulf and spread across the global energy system,” he added.

Since no concrete agreement was reached in negotiations between the United States (US) and Iran over the nuclear program, the US and Israel began military airstrikes against Iran on February 28. In response, Iran launched missile and drone attacks on Israel and US military facilities located in countries across the region, starting the same day.

On the first day of the air strikes against Iran, Iran’s Supreme Leader Ayatollah Seyyed Ali Khamenei and several high-ranking military officials were killed. On March 8, Iran’s Assembly of Experts elected Seyyed Mojtaba Khamenei as Iran’s third Supreme Leader by majority vote.

From March 1 through March 5, the confrontation expanded further, affecting several countries across the Middle East.