Earlier this week, most oil market watchers were startled when they came across reports that suggested oil prices could shoot to $250 a barrel. The prediction was made by Artem Avinov, leading analyst with TeleTrade, who was quick to add that it was a possibility and not a probability. But there are other scary forecasts doing the rounds.
All this stems from the threat issued by Iran’s Revolutionary guards that Iran could block the Strait of Hormuz, a crucial artery for oil and LNG shipments, if Iran’s oil exports were harmed in any way.
It must be remembered that almost half the world’s daily supply of crude passes through the Hormuz Strait (see map). Much of the crude from Saudi Arabia, Iran, the United Arab Emirates, Kuwait, and the LNG from Qatar passes through the Strait of Hormuz.
Another analyst Vladimir Rojankovski, expert at the International Financial Center in Moscow, told RT, that if exports through the Strait of Hormuz stop, “the law of supply and demand would double oil prices to $160 per barrel.” Read More
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