Oil Supply Shock Could Push Brent to $140 on Hormuz Closure Risk
ING analysts warn closure of Strait of Hormuz could cut 20 million bpd exports, pushing Brent to $100-140 per barrel. Unconfirmed strikes on Iran’s Kharg Island hit 1.5 million bpd exports and Israel’s gas field shutdown raises supply disruption risk to USO.
1. Geopolitical Risk at Strait of Hormuz
ING analysts highlight that closure of the Strait of Hormuz could bottleneck roughly 20 million barrels per day of oil exports from major producers, creating an immediate squeeze on Brent crude pricing and significantly influencing oil-tracking ETFs like USO.
2. Kharg Island and Gas Field Disruptions
Reports of strikes on Iran’s Kharg Island threaten to knock out about 1.5 million barrels per day of exports, and Israel’s pre-emptive shutdown of Leviathan and Karish gas fields removes 17 billion cubic meters of annual production, intensifying regional supply shortfalls.
3. Price Surge Scenarios and ETF Impact
Analysts project that under extended supply disruptions, Brent crude could surge to $100-140 per barrel, a range that would drive substantial inflows and volatility for USO, as investors seek protective energy exposure.