Strait of Hormuz Tensions Could Trigger Oil Price Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: CNBC
- Supply Shock Warning: Following U.S. strikes on Iran, markets brace for potential disruptions in oil flows through the Strait of Hormuz, with analysts cautioning that escalating tensions could lead to significant global oil supply risks, potentially driving prices into triple digits.
- Critical Transit Route: The Strait of Hormuz serves as a vital transit route for approximately 13 million barrels per day of crude oil, accounting for 31% of global seaborne oil flows, meaning any disruption would have profound implications for the global oil and gas markets, particularly affecting major producers like Saudi Arabia, Iran, and the UAE.
- Market Reaction Expectations: Analysts anticipate a
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Analyst Views on BP
Wall Street analysts forecast BP stock price to rise
11 Analyst Rating
5 Buy
5 Hold
1 Sell
Moderate Buy
Current: 37.990
Low
6.38
Averages
84.26
High
503.69
Current: 37.990
Low
6.38
Averages
84.26
High
503.69
About BP
BP p.l.c. is a United Kingdom-based integrated energy company. The Company's segments include Gas & low carbon energy, Oil production & operations, Customers & products, and Other businesses & corporate. Its gas business includes regions with upstream activities that produce natural gas, integrated gas and power, and gas trading. Its low carbon business includes solar, offshore and onshore wind, hydrogen and carbon capture and storage and power trading. Oil production & operations segment comprises regions with upstream activities that predominantly produce crude oil, including bpx energy. Customers & products segment comprises its customer-focused businesses, which include convenience and retail fuels, electric vehicle charging, as well as Castrol, aviation and business to business and midstream. It also includes its products businesses, refining and oil trading, as well as its bioenergy businesses. Other businesses & corporate segment comprises technology and bp ventures.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Supply Shock Warning: Following U.S. strikes on Iran, markets brace for potential disruptions in oil flows through the Strait of Hormuz, with analysts cautioning that escalating tensions could lead to significant global oil supply risks, potentially driving prices into triple digits.
- Critical Transit Route: The Strait of Hormuz serves as a vital transit route for approximately 13 million barrels per day of crude oil, accounting for 31% of global seaborne oil flows, meaning any disruption would have profound implications for the global oil and gas markets, particularly affecting major producers like Saudi Arabia, Iran, and the UAE.
- Market Reaction Expectations: Analysts anticipate a
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- Clear Strategic Objectives: The strikes target not only Iran's nuclear weapons program but also its command and control structures and military leadership, aiming to overthrow the Iranian regime through domestic unrest or a coup, reflecting US intentions to assert control over critical Middle Eastern oil resources.
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- Price Surge Expectations: Crude oil futures are expected to rise by $5 to $7 when trading opens on Sunday, with Brent crude settling at $72.48 per barrel on Friday, as the market begins to price in potential risks that could push prices above $100 per barrel.
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- Legal Challenges: The National Trust for Historic Preservation filed a lawsuit seeking to pause construction, arguing that the project does not comply with federal laws and regulations; however, the judge stated that the current arguments were insufficient for a preliminary injunction, potentially affecting future legal strategies.
- Progress and Budget: Trump announced that construction is ahead of schedule and under budget following the ruling, which not only aids the project's feasibility but may also bolster public confidence in government efficiency.
- Historical Context: Notably, Trump proposed the ballroom idea back in 2010 during the Obama administration, and the advancement of this project reflects his long-term policy vision and emphasis on the functionality of the White House.
See More
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- Supply Shock Warning: Following U.S. strikes on Iran, markets brace for potential disruptions in oil flows through the Strait of Hormuz, with analysts cautioning that escalating tensions could lead to significant global oil supply risks, potentially driving prices into triple digits.
- Critical Transit Route: The Strait of Hormuz serves as a vital transit route for approximately 13 million barrels per day of crude oil, accounting for 31% of global seaborne oil flows, meaning any disruption would have profound implications for the global oil and gas markets, particularly affecting major producers like Saudi Arabia, Iran, and the UAE.
- Market Reaction Expectations: Analysts anticipate a
See More
Escalating Middle East Conflict: US-Israel Joint Strikes on Iran
- Military Conflict Escalation: The US and Israel launched joint airstrikes on Iran, resulting in the assassination of Supreme Leader Khamenei, with analysts warning that this could mark the beginning of sustained military operations, potentially leading to rapid regional and global destabilization.
- Clear Strategic Objectives: The strikes target not only Iran's nuclear weapons program but also its command and control structures and military leadership, aiming to overthrow the Iranian regime through domestic unrest or a coup, reflecting US intentions to assert control over critical Middle Eastern oil resources.
- Strong International Reactions: Both Russia and China condemned the US military actions, and while neither can provide substantial support in the current situation, China's purchase of over 80% of Iran's oil in 2025 underscores its critical economic role for Iran amid heavy sanctions.
- Negotiation Prospects Shattered: The military actions have effectively destroyed any remaining chances for a negotiated settlement regarding Iran's nuclear program, with analysts noting that the US and Israel seized the opportunity to reshape the regional power dynamics amid Iran's critical vulnerability.
See More
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- Supply Disruption Risk: The joint U.S. and Israeli attack on Iran risks a major oil supply disruption, with Iran being the fourth-largest OPEC producer at over 3 million barrels per day, heightening the risk of a global economic recession if the situation escalates.
- Price Surge Expectations: Crude oil futures are expected to rise by $5 to $7 when trading opens on Sunday, with Brent crude settling at $72.48 per barrel on Friday, as the market begins to price in potential risks that could push prices above $100 per barrel.
- Strategic Importance of Strait of Hormuz: In 2025, over 14 million barrels of oil flowed through the Strait of Hormuz, accounting for a third of the world's seaborne crude exports, and any closure would severely impact the global economy, particularly for major importers like China.
- Market Response and Reserve Strategy: Should oil prices spike, the Trump administration may tap into the Strategic Petroleum Reserve, which currently holds about 415 million barrels, but analysts warn that a prolonged crisis in Hormuz could exceed the offset capabilities of U.S. and IEA reserves.
See More
President Trump Expresses Discontent with Iran Negotiations, Claims They Aren't Committed Enough; No Enrichment, Not Even 20%
Trump's Stance on Iran: President Trump expressed dissatisfaction with Iran's negotiation approach, indicating that they are not willing to compromise significantly.
Concerns Over Enrichment: Trump emphasized that there should be no enrichment of uranium by Iran, reiterating a hardline stance on nuclear negotiations.
Frustration with Current Negotiations: He conveyed that the current state of negotiations with Iran is unsatisfactory and does not meet U.S. expectations.
Overall Sentiment: Trump's comments reflect a broader frustration with Iran's actions and the ongoing diplomatic efforts surrounding their nuclear program.
See More
US-Iran Talks Fail to Achieve Breakthrough, Negotiations Extended
- Limited Negotiation Progress: Iranian Foreign Minister Araghchi stated that while some progress was made during the talks in Geneva, no substantial agreement was reached, leading both sides to agree to extend negotiations, highlighting the complexity and urgency of the current situation.
- Key Issues Unresolved: Central to the discussions are the lifting of U.S. sanctions on Iran and nuclear-related steps; although both sides plan to engage in more detailed discussions next week in Vienna, Iran's refusal to commit to not developing nuclear weapons remains a significant sticking point.
- Escalating Military Tensions: The U.S. has amassed a large military presence in the Middle East, with Trump warning of
See More
