Strait of Hormuz holds the key to oil prices as Israel, Iran trade attacks
Senior Australian economists believe the spike in oil prices driven by the Israel-Iran war will prove short-lived.
Eminent Australian economists believe the spike in global oil prices sparked by the Israel-Iran conflict will be short-lived — unless Tehran closes off the Strait of Hormuz, a crucial passageway for the commodity.
Crude oil prices jumped 7% higher on Friday, the day Israel launched a series of missile strikes on Iran, and have continued to climb since after tit-for-tat retaliations.
The global scramble for strategic energy assets was underscored on Monday when Abu Dhabi’s massive state-owned oil company on Monday made a nearly $30 billion cash takeover tilt at Australian oil and gas giant Santos.
Economists say the biggest upside risk to oil prices moving forward would be Iran closing the Strait of Hormuz, which state-run Iranian news agency IRINN reported was “being seriously reviewed”.
