Despite the escalating tensions between Israel and Iran, the recent exchange of blows has had little impact on the oil market. Despite Iran’s increased exports, the conflict has failed to disrupt the stability of oil prices. North Sea Brent oil saw minimal fluctuations, indicating that all parties involved are not interested in prolonging the conflict.
Political risk in the region has already been factored into the rising oil prices seen in recent weeks and months. While tensions have escalated, oil supply has not been significantly affected. Iran’s ability to bypass sanctions and increase exports is attributed to advancements in their fleet of oil tankers. The expansion of their tanker fleet and utilization of creative methods to circumvent sanctions have allowed Iran to boost its oil exports.
The discussion around imposing stricter sanctions continues, but targeting Chinese financial institutions poses risks to the delicate US-China relationship. The increase in floating oil storage indicates Iran’s capability to meet demand, especially in China, despite geographical limitations. With Iranian oil prices likely lower than the world market price due to its quality and constraints, the discussion around sanctions and their effectiveness remains ongoing.
Iran’s ability to maintain its export strength despite external pressures highlights the complexity and challenges in the global oil market. Market analysts believe that all parties involved are not interested in prolonging the conflict, but it remains uncertain how long this trend will continue or if it will change with a shift in political circumstances.