Following the Israeli attack on Iranian nuclear facilities on June 13, 2025, oil prices skyrocketed. $IOIL00 (+0.43%) rose to USD 77 per barrel, the sharpest increase since the coronavirus crisis in 2020. The market reacted with price losses, and shifts into $965515 (-0.49%) the US dollar and bonds.
Chapter overview:
I: Key facts
II: Strait of Hormuz
III: Oil Infrastructure
IV: Oil in connection with CPI data
V: Scenarios for this conflict
Let's take a sober look at the situation, is the oil price overreacting?
I: Key Facts
Iran currently produces around 3.3 to 4 million barrels of oil per day and exports around 1.5 to 1.7 million barrels, with the majority of these exports going to China. Should there be a shortfall in Iranian exports, for example due to attacks on production facilities or sanctions, this would be manageable for the commodities market in the short term. The daily volume corresponds to only a small part of the global oil demand of over 100 million barrels per day. This means that although the market will react to a shortfall, other producers such as the USA, Brazil or Saudi Arabia will be able to close part of the gap. The actual market reaction is therefore not primarily driven by a real supply shortfall, but by the fear of further escalation.
If we look at the status quo from a market psychology perspective, then the main cause of the price jumps is uncertainty about a possible spread of the conflict to the entire Gulf region. After all, this region is responsible for around a fifth of global oil shipments, as it is home to key oil-producing countries such as Saudi Arabia, Iraq, the United Arab Emirates and Kuwait. The mere possibility that the conflict could spread and other countries or production facilities could be affected leads to risk premiums on the futures market. Traders are therefore buying oil futures as a hedge against possible supply chain issues, which is also driving up prices. The fear of a blockade of the Strait of Hormuz, one of the world's most important oil transport routes, is a particularly strong price driver.
II: Strait of Hormuz
๐ฃ๐๐พ๐พ ๐ฒ๐๐๐บร๐พ ๐๐๐ ๐ง๐๐๐๐๐ ๐๐พ๐๐ป๐๐๐ฝ๐พ๐ ๐ฝ๐พ๐ ๐ฏ๐พ๐๐๐๐๐ผ๐๐พ๐ ๐ฆ๐๐ ๐ฟ ๐๐๐ ๐ฝ๐พ๐ ๐ฆ๐๐ ๐ฟ ๐๐๐ ๐ฎ๐๐บ๐ ๐๐๐ฝ ๐ฝ๐พ๐ ๐ ๐๐บ๐ป๐๐๐ผ๐๐พ๐ ๐ฌ๐พ๐พ๐. ๐ณรค๐๐ ๐๐ผ๐ ๐๐บ๐๐๐๐พ๐๐พ๐ ๐ฝ๐๐๐ ๐๐๐๐ฝ 20 ๐ฌ๐๐ ๐ ๐๐๐๐พ๐ ๐ก๐บ๐๐๐พ๐ ๐ฑ๐๐รถ๐ , ๐พ๐๐๐บ ๐พ๐๐ ๐ฅรผ๐๐ฟ๐๐พ๐ ๐ฝ๐พ๐ ๐๐พ๐ ๐๐๐พ๐๐๐พ๐ ๐ก๐พ๐ฝ๐บ๐๐ฟ๐. ๐ฒ๐๐พ ๐๐๐ ๐ฝ๐บ๐๐๐ ๐ฝ๐๐พ ๐๐๐ผ๐๐๐๐๐๐๐พ ร๐ ๐๐๐บ๐๐๐๐๐๐๐๐๐๐๐พ ๐ฝ๐พ๐ ๐ถ๐พ๐ ๐.
But a spear of the road is small at the moment. It has to be said that a closure in the future is also very low, because it has never been closed. Bear in mind that there was much more conflict in the region at the time. During the Iraq-Iran war, also known as the tanker war, numerous oil tankers were attacked, but the road remained open despite heavy fighting. Iran has also repeatedly threatened to block the strait in recent decades, particularly in response to sanctions or military pressure. However, the threats were never carried out. From a game theory perspective, this is called an empty threat.
There are several reasons for not closing the straits. First, the US and allies have a strong naval presence in the region to ensure freedom of navigation. Secondly, Iran is also dependent on the revenue from oil exports via the Strait of Hormuz. A blockade would have a massive economic impact on its own country.
III: Oil infrastructure
Another point responsible for price spikes would be the threat to the oil infrastructure in the Middle East. Should there be attacks on production facilities, pipelines or oil ports, large quantities of oil could disappear from the market in the short term. Targeted attacks on Iranian facilities alone could result in a loss of 1.7 million barrels per day of exports, enough to tip the market from surplus to deficit and drive prices to USD 80 or more. Even more serious, of course, would be attacks or blockades affecting the Strait of Hormuz, but this is unlikely as mentioned above.
๐ช๐๐๐๐๐๐ผ๐๐พ ๐ค๐๐พ๐๐๐๐พ๐๐๐ฟ๐๐บ๐๐๐๐๐๐๐๐ ๐๐ ๐ฏ๐พ๐๐๐๐๐ผ๐๐พ๐ ๐ฆ๐๐ ๐ฟ, ๐ฝ๐บ๐๐๐๐๐พ๐ ร๐ ๐๐บ๐ฟ๐ฟ๐๐๐พ๐๐๐พ๐ (๐๐๐พ ๐ ๐ป๐บ๐ฝ๐บ๐ ๐๐๐ฝ ๐ก๐บ๐๐ฝ๐บ๐ ๐ ๐ป๐ป๐บ๐), ๐ฒ๐ผ๐๐ รผ๐๐๐พ๐ ๐๐พ๐๐๐๐๐บ๐ ๐ (๐ช๐๐บ๐๐ ๐จ๐๐ ๐บ๐๐ฝ ๐๐๐ 28 ๐ฌ๐๐. ๐ก๐บ๐๐๐พ๐ ๐ซ๐บ๐๐พ๐๐๐บ๐๐บ๐๐๐รค๐) ๐๐๐ฝ ๐ฏ๐๐๐พ๐ ๐๐๐พ๐. ๐ ๐ ๐ ๐พ ๐ ๐๐ ๐บ๐๐พ๐ ๐ ๐๐พ๐๐พ๐ ๐๐บ๐๐พ ๐ฝ๐พ๐ ๐๐๐๐บ๐๐พ๐๐๐๐ผ๐๐พ๐ ๐ฒ๐๐๐บร๐พ ๐๐๐ ๐ง๐๐๐๐๐ - ๐๐๐๐พ๐ ๐ต๐พ๐๐๐๐๐ฝ๐ป๐บ๐๐๐พ๐๐ ๐๐บ๐ผ๐๐ ๐๐๐พ ๐๐ ๐๐๐๐พ๐๐๐๐พ๐ ๐ ๐พ๐ ๐น๐๐พ๐ ๐พ๐ ๐ป๐พ๐ ๐๐๐ ๐๐รค๐๐๐๐ผ๐๐พ๐ ๐ค๐๐๐บ๐ ๐บ๐๐๐๐๐พ๐.
IV: Oil in connection with CPI data
In principle, an increase in the price of oil has a direct and indirect effect on inflation. economists estimate that a 10 percent increase in the price of oil increases consumer prices by around 0.4% in the following year. This means that if the oil price rises from USD 80 to USD 88 per barrel, inflation in Europe or the USA could be almost 0.5% higher next year than it would otherwise be. This would not necessarily play into his hands, for example, the last thing he needs is high CPI data.
V: Scenarios for this conflict
A. Regional conflict (probability 70-80%*)
If the conflict remains limited to Israel and Iran, I expect a stabilization at the level of USD 75-80 per barrel. Iran's production and export volumes (around 1.5-1.7 million barrels/day) could be at least partially offset by other producers, as mentioned above.
B. Expansion to the Gulf region (probability 15-25%* )
Should the conflict spread to other countries in the Persian Gulf or targeted attacks on production facilities occur, prices could rise further. One can assume 90-100 US dollars per barrel. Even a partial escalation of the conflict could lead to production losses or transportation delays. Such a price rise would fuel inflation worldwide, increase transportation and production costs and tend to slow down economic growth. The stock markets would come under more pressure and central banks could be forced to keep interest rates high or even raise them again. This would not play into Trump's hands, for example, so he will try to keep the conflict regional if he can.
C. Blockade of the Strait of Hormuz (probability 1-5%*)
The blockade of the Strait of Hormuz is considered a nightmare scenario for the markets. This could lead to a doubling of oil prices within a few hours, with forecasts of USD 100 to 130 per barrel. Every day, 20-21 million barrels of crude oil are shipped via the Strait, i.e. around 20% of global consumption and around a quarter of the global LNG trade. A blockade would therefore suddenly remove a fifth of the global oil supply from the market. Refineries in Asia and Europe would be forced to fall back on emergency reserves. The stock markets would plummet and freight rates for tankers would also explode
*๐ฌ๐พ๐๐๐พ๐พ ๐ ๐๐๐บ๐ป๐พ๐
