Brent: Conflict-driven spike and eurozone risks – Commerzbank
|Commerzbank analysts Charlie Lay and Moses Lim note Brent crude has surged toward USD79–80 as shipping through the Strait of Hormuz is effectively halted, disrupting Oil and LNG flows. They argue that if the Middle East war drags on for months, eurozone inflation could rise by at least 1 percentage point and growth fall by a few tenths, though they assume a shorter conflict.
Hormuz disruption and eurozone impact
"Brent crude oil surged toward USD79–80 per barrel after shipping through the Strait of Hormuz, the world’s most critical oil chokepoint, was effectively halted following Iranian threats to attack vessels attempting passage."
"The disruption has also affected liquefied natural gas (LNG) shipments, with exports temporarily halted, raising energy prices."
"If, on the other hand, the war were to drag on for several months, inflation in the eurozone would probably rise by at least 1 percentage point and economic growth would be a few tenths of a percentage point lower which would be painful."
"The price of oil has jumped again today by more than 5 US Dollar per barrel to just under 80 USD."
"However, according to futures markets, the oil price is likely to fall significantly again in the summer."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.