The ongoing conflict between Israel and Iran has sparked heated debates, but its impact on the oil market has been surprisingly minimal. Despite the escalating tensions, oil prices have remained stable, with North Sea Brent oil seeing only slight fluctuations. Market analysts believe that all parties involved are not interested in prolonging the conflict and that the attacks are primarily aimed at avoiding appearing weak.
In recent weeks and months, political risk in the region has contributed to rising oil prices. However, despite the escalating tensions, oil supply has not been significantly affected. Iran’s exports of crude oil and condensates have increased, reaching levels not seen in years despite US sanctions. The absence of the word “oil” in new US and EU sanctions against Iran indicates a focus on limiting revenue without major disruptions in oil supply.
Iran’s ability to bypass sanctions and increase exports is attributed to advancements in their fleet of oil tankers. The expansion of their tanker fleet and creative methods to circumvent sanctions have allowed Iran to boost its oil exports. While discussions around imposing stricter sanctions continue, targeting Chinese financial institutions poses risks to the delicate US-China relationship.
The increase in floating oil storage indicates Iran’s capability to meet demand, especially in China, despite geographical limitations. With Iranian oil prices likely lower than world market prices due to its quality and constraints, discussions around sanctions and their effectiveness remain ongoing.
Overall, the complexity and challenges faced by countries competing for global market share highlight the need for diplomatic solutions that prioritize peaceful resolution of conflicts over economic gain.
