Freight ships sail in the wave of the Iranian port city of Bandar Abbas, the most important basis of the Navy of the Islamic Republic and has a strategic position in the Strait of Hormuz, on April 29, 2019.
Atta Kenare | AFP | Getty images
Iran can threaten to close the street of Hormuz, but experts told CNBC that it is also the one with the most to lose.
In large relocation after the US had hit Iranian nuclear sites, the parliament of the country on Sunday reportedly approved the closure of the Strait of Hormuz, so that the alienation of its neighbors and trading partners is at risk.
The decision to close the Waterweg is now based on the National Security Council of the country, and the possibility has increased the ghost of higher energy prices and worsened geopolitical tensions, in which Washington Beijing evokes to prevent the closure of the street.
Vanda Hari, founder of Energy Intelligence Firm Vanda Insights, told CNBC's “Squawk Box Asia” that the possibility of closure remains “absolutely minimalist”.
When Iran blocks the Zeestraat, the country threatens to make its adjacent oil -producing countries in enemies and risks hostilities with them, she said.
Moreover, a closure would also provoke the Iran's market in Asia, in particular China, which is a majority of exports of Iranian oil.
“So very, very little to be achieved, and a lot of self -affected damage that Iran could do,” said Hari.
Her vision is supported by Andrew Bishop, senior partner and worldwide head of policy research at Signum Global Advisors consultancy.
Iran will not want to oppose China, he said, adding that disturbing stocks “will set a target” on the country's own oil production, export infrastructure and regime “at a time when there is little reason to doubt our and Israeli decision to be 'trigger-happy'.
Clayton Seigle, Senior Fellow for Energy Ziekenkord and Climate Change in the Center for Strategic and International Studies said that, since China is “very dependent” from the Golf oil flows, not only Iran, “his national security interest would stabilize the situation and a de-escalation that has been safe, really streams of oil and gas through the street.”
According to the Joint Maritime Information Center, there are currently no indications for commercial shipping through the Waterweg. “American associated ships have successfully transferred the Strait of Hormuz without interruption, which is a positive sign for the near future.”
Impact of possible disruptions
The Strait of Hormuz is the only Zeroute from the Persian Gulf to the open ocean, and about 20% of the world's oil freedom passes the Waterweg. The US Energy Information Administration has described it as the 'most important oil transport ChokePoint' the world's most important oil transport.
“Iran's activities in and around Hormuz will probably not be 'everything or nothing' – but instead move a sliding scale by total disruption to no one,” said Bisum's Bishop.
“The best strategy [for Iran] Would be to rattle the oil flows of Hormuz to hurt the US through moderate upward price movement, but not enough to provoke a large American reaction to the oil production and export capacity of Iran, “he added.
On Sunday, Patrick de Haan, head of Petroleumanalysis at gas buddy, said in a post on X that could rise in the US pump prices in the coming days to $ 3.35- $ 3.50 per gallon compared to the national average of $ 3.139 for the week of June 16.
If Iran decides to close the street, it would probably use small boats for a partial blockade, or for a more complete solution, the Waterweg, according to David Roche, strategist at Quantum Strategy.
In a Sunday note, S&P Global Commodity Insights wrote that every Iranian closure of the street would mean that not only Iran's own exports would be hit, but also those of nearby golf countries, such as Saudi Aarabia, the United Arab Emirates, Kuwait and Qatar.
That might remove more than 17 billion barrels of oil from the world markets and influence regional refineries by causing nutritional deficits, the research agency said. The disruption of delivery will influence Asia, Europe and North America.
In addition to oil, natural gas flows can also be “seriously affected,” S&P said with Qatar's gas output of approximately 77 million tonnes per year may not be able to reach important markets in Asia and Europe.
The LNG export of Qatar represents approximately 20% of the worldwide LNG offer.
“Alternative delivery routes for oil and gas from the East are limited, with pipeline capacity insufficient to compensate for potential maritime disruptions by the Persian Gulf and the Red Sea,” S&P added.
The Commonwealth Bank of Australia pointed out that “there is a limited scope to bypass the street of Hormuz.” Pipelines in Saudi Aarabia and the VAE only have a reserve capacity of 2.6 million barrels a day between them, while the street supervises the transport of an estimated 20 million barrels of oil and oil products per day, the bank said in a memorandum.
All these form an upward risk for energy prices, with Goldman Sachs estimating that the market praises with a geopolitical risk premium of $ 12.
If the oil through the Zeestraat would fall by 50% for a month and then stay for another 11 months by 10%, Brent would be expected to “jump short” to a peak of around $ 110, Goldman said.
Brent Oliefutures currently amount to $ 78.95 per barrel, while West Texas Intermediate Futures acted at $ 75.75.
