\n<\/p>\n
Unlock the Editor\u2019s Digest for free<\/p>\n
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n Oil prices hit a five-month high before giving up most of their gains on Monday, after an immediate Iranian response to US strikes on its nuclear facilities failed to materialise, leaving crude supply from the Middle East still unaffected by the escalating conflict.<\/p>\n Brent crude, the international oil benchmark, rose as high as $81.40 a barrel when the market opened on Monday. But it later dropped to trade 0.3 per cent lower on the day at $76.76 by early afternoon in London. <\/p>\n The US marker, West Texas Intermediate, rose as much as 4.6 per cent to $78.40 before erasing those gains to trade down 0.4 per cent at $73.58. <\/p>\n Oil prices have risen about 10 per cent since Israel launched its first surprise attack on Iran 10 days ago. However, global crude prices are still lower than they were in January, largely because supply from the region has not yet been affected.<\/p>\n \u201cSo far, not a single drop of oil has been lost to the global market,\u201d said Bjarne Schieldrop, chief commodities analysts at SEB. \u201cThe market is still on edge awaiting what Iran will do,\u201d he said.<\/p>\n Iran\u2019s top military commander, Major General Abdolrahim Mousavi, has said Iran\u2019s forces are entitled to retaliate against US interests, adding that America\u2019s \u201cillegitimate and aggressive proxy, Israel, will be punished\u201d.<\/p>\n Further moves in the oil price this week will depend on the nature of that retaliation and whether or not the Islamic republic or its proxies, such as the Houthis, target energy infrastructure or shipping, analysts said.<\/p>\n Hardliners in Iran were already calling for action on Sunday, with the influential editor of the Kayhan newspaper demanding that the country attack the US naval fleet in the Gulf and stop western ships moving through the Strait of Hormuz.<\/p>\n About a third of the world\u2019s seaborne oil supplies pass daily through the narrow waterway separating Iran from the Gulf states, and any attacks on shipping in the strait would immediately cause energy prices to soar, analysts said.<\/p>\n Iran has previously threatened to shut the strait, though analysts believe that it would struggle to completely block the waterway because of the presence of the US Navy\u2019s Fifth Fleet in Bahrain.<\/p>\n \u201cSecurity officials maintain that it would be difficult for Iran to fully close the Strait of Hormuz for an extended period,\u201d said Helima Croft, a former CIA analyst who is now at RBC Capital Markets. \u201cThat said, multiple security experts contend that Iran has the ability to strike individual tankers and key ports with missiles and mines,\u201d she added.<\/p>\n Iran also uses the waterway to ship its oil to China and other buyers.<\/p>\n Two tankers heading into the Gulf have made last-minute changes of course to avoid the strait. The Coswisdom Lake turned around at 15.30 GMT on Sunday at the narrowest point of the strait, according to Marine Traffic, before making another turn and heading into the Gulf. The South Loyalty turned around three hours earlier and is anchored off Khor Fakkan, a town in the United Arab Emirates.<\/p>\n An alternative response by Iran could see it attack oilfields and infrastructure in US allies in the region, such as Saudi Arabia and Qatar. Anxious about getting drawn into the conflict, Gulf countries have repeatedly called for an end to hostilities and a return to dialogue. <\/p>\n In a statement on Sunday morning, Doha\u2019s foreign ministry warned that the \u201cdangerous tension\u201d in the region could have \u201ccatastrophic repercussions\u201d. Saudi Arabia said it was following developments in Iran with \u201cgreat concern\u201d.<\/p>\n Analysts at S&P Global Commodity Insights had predicted that Sunday night\u2019s rally in oil prices would ease by Monday morning if there was no immediate Iranian response.<\/p>\n \u201cThe key question is what comes next,\u201d wrote James Bambino and Richard Joswick at S&P in a note. \u201cWill Iran attack US interests directly or through allied militias? Will Iranian crude exports be suspended? Will Iran attack shipping in the Strait of Hormuz?\u201d<\/p>\n Recommended<\/p>\n Even if Iranian crude exports were disrupted, increased production from the Opec+ cartel and current global inventories mean the oil market will remain sufficiently supplied, so long as the Strait of Hormuz remains open, they added.<\/p>\n Iran exports about 2mn barrels of oil a day. About 21mn barrels from Iran, Iraq, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates pass daily through the Strait of Hormuz.<\/p>\n Analysts said the longer that tensions in the Middle East continued, the greater the risk of a prolonged period of high oil prices, which could lift inflation and dent global economic growth.<\/p>\n \u201cThe Trump administration will likely find it difficult to balance crippling Iran\u2019s nuclear ambitions while avoiding a prolonged spike in crude oil prices, in turn, elevating inflation and weakening the US economy,\u201d said Michael Alfaro, chief investment officer at Gallo Partners, a hedge fund focused on energy and industrials.<\/p>\n Additional reporting by William Sandlund in Hong Kong and Robert Wright in London<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Oil prices hit a five-month high before giving up most of their gains on Monday, after an immediate Iranian response to US strikes on its nuclear facilities failed to materialise, leaving crude supply from the<\/p>\n","protected":false},"author":1,"featured_media":9453,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[1717,1719,1718,949,102,268,1319],"class_list":{"0":"post-9452","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-5month","9":"tag-gains","10":"tag-giving","11":"tag-high","12":"tag-hits","13":"tag-oil","14":"tag-price"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/9452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9452"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/9452\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/9453"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}