Oil rises 1%, as US-Iran strikes risk limiting already impaired supplies
XLE•Strait of Hormuz traffic remains constrained
The war began with joint U.S.-Israeli strikes on Iranian targets in late February. Since then, Iran has effectively shut down shipping traffic in the Strait of Hormuz, a critical waterway that carried about a fifth of global oil and LNG consumed before the conflict.
Nations worldwide have been trying to limit price rises by finding other sources of supply and relying on their reserves, which have also dwindled.
"While the increase in conflicts will slow transit through the Strait of Hormuz in the near term, the market has absorbed the fact that workaround crude oil supplies can still make it to the market eventually," said Dennis Kissler, senior vice president of trading at BOK Financial.
The Islamic Revolutionary Guard Corps said the U.S. attacks would further restrict traffic through the strait.
On Tuesday, U.S. Secretary of Energy Chris Wright claimed that 17 million barrels of oil transited the Strait of Hormuz on Monday, calling it the largest volume of crude to pass through the waterway since the Iran war began.
