Oil: Supply shock risk grows with Hormuz shutdown – Danske Bank

Danske Research Team highlights severe disruption to Oil and gas markets as conflict involving the United States, Israel and Iran escalates. Shipping through the Strait of Hormuz has stalled, stranding significant volumes and driving freight rates sharply higher.

Middle East conflict drives energy repricing

"These price movements reflect growing supply fears following precautionary shutdowns of key oil and gas facilities in the Middle East. Israeli and US strikes on Iran, along with Tehran's retaliatory actions, prompted QatarEnergy to halt LNG production after its facilities were hit by Iranian drones. Saudi Arabia also shut down its Ras Tanura refinery, a major crude export terminal, after a drone strike."

"Shipping through the vital Strait of Hormuz (SOH) has come to a standstill, leaving 77 million barrels of oil stranded on 150 tankers in the Persian Gulf. While an Iranian Revolutionary Guards official declare the SOH closed and threatened to target ships attempting passage, the US military's Central Command insisted the Strait remains open."

"Nevertheless, shipping is expected to remain idle until safe passage can be ensured. The disruptions further strained global supply chains, pushing the benchmark freight rate to a record high, doubling since Friday. Daily LNG tanker freight rates jumped more than 40% on Monday following Qatar's production halt, amplifying concerns over energy shortages."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)