Oil prices soared after US and Israeli attacks on Iran continued on Sunday night.
Brent is raw Prices hit a new 52-week high on Monday, rising 9.3% to $79.40, while the U.S. West Texas Intermediate Prices also rose more than 9% to $73.10.
US President Donald Trump said the “massive military offensive” – which he called Operation Epic Fury – will continue until US objectives are achieved. Israel launched new strikes against Iran and Hezbollah targets in Lebanon late Sunday, which came after Iran attacked military and infrastructure targets in several countries in the region.
Brent is raw.
As the US continues to target Iranian air defense systems and naval capabilities, global oil supplies have come under intense scrutiny.
Amrita Sen, founder and research director of Energy Aspects, told CNBC on Monday that she expects oil prices to stay around the $80 level for some time.
Sen said it was unlikely that the Strait of Hormuz would be completely closed by an oil flow of 13-15 million barrels, or 20% of global supply. The biggest risk, he said, comes from one-off attacks on ships passing through the area.
Sen said the US and Israel have the superior military power to ultimately neutralize Iran’s ability to completely shut down the strait, a key shipping route for oil producers such as Saudi Arabia, the UAE, Iraq, Iran and Kuwait.
But a single attack on ships is more difficult to prevent. “This is something we have warned our customers about,” he said.
WTI.
After three tankers were hit over the weekend, shippers are now extremely cautious about going in, he said.
“That’s the big issue right now — how do Asian refiners actually get volumes from the Middle East?” Sen added.
He noted that Oman and some UAE grids could bypass the strait, while Saudi Arabia has contingency plans to move its oil through the Red Sea via an east-west pipeline.
“But even if you can move 5 million through other means, about 10 are still stuck,” he said.
If the energy infrastructure is hit, the price of oil could reach $100, Sen said.
“The stakes are very high” when it comes to potential attacks on infrastructure, he said.
