09 January 2012 21:39 [Source: ICIS news]
WASHINGTON (ICIS)--An Iranian blockade of the Strait of Hormuz would have a huge impact on world oil prices and could plunge Europe into deep recession and likely bring the ?xml:namespace>
In an analysis of the simmering crisis relations between the
In a white paper titled “Oil in a Strait Jacket?”, MAPI economist Donald Norman said that blockage of the Strait of Hormuz could pump global oil prices from their current $100/bbl range as high as $290/bbl or even $380/bbl if the interruption of oil supplies through the strait were prolonged.
In recent weeks various Iranian officials have threatened that Tehran would close the strait if the US and allies go forward with further sanctions aimed at impeding what the US and other nations allege is Iran's nuclear weapons programme.
Norman noted that about 17m bbls/day of crude oil move through the strait, representing 19% of global consumption.
Any increase in the global price of crude would be reflected in the prices of petroleum products, he noted.
“Currently, the spot price of oil [WTI] is around $103/bbl and the average price of gasoline in the
But any closure of the Strait of Hormuz would likely be temporary,
That reserve, created precisely for an emergency situation such as a Strait of Hormuz closure, holds nearly 700m bbls of crude and could make up the 1.825m bbls/day lost from Persian Gulf suppliers for as long as a year.
Still, a crisis in the Strait of Hormuz would raise oil prices sharply, and that in turn would put the
($1 = €0.79)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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