US-Iran Tensions Escalate as Iran Threatens Hormuz Closure, Potentially Rattling Global Oil Markets

The recent US strike on Iran’s nuclear facilities has sparked concerns about the potential repercussions on global oil prices, as market analysts and traders assess the situation.

What Happened: According to a report, the US’s Saturday assault on Iran’s nuclear infrastructure could significantly influence oil prices, although the long-term consequences are still unclear.

Oil market participants are now contemplating whether the US’s actions might trigger a broader conflict that could disrupt Persian Gulf exports, Muyu Xu, a senior Asia crude oil analyst at Kpler, a global commodities and shipping data firm, told The New York Times.

Such a situation could inflate prices if oil-loading facilities are compromised or tanker traffic is impeded.

Despite the recent intensification of the Israel-Iran conflict, oil supplies have remained largely unaffected. However, oil prices have surged approximately 10 percent since the onset of hostilities with Israel’s unexpected attack on Iran on June 13.

Any Iranian military response that disrupts oil flow would predominantly impact China, Iran’s main oil export customer and close ally.

In contrast, the US, which purchases less than 3 percent of the Persian Gulf’s oil, would be less affected due to its increased domestic oil production from fracking technologies.

Also Read: Donald Trump Announces ‘Spectacular Military Success' As US Strikes Key Iranian Nuclear Sites

Meanwhile, Iran's parliament voted on Sunday to authorize the potential closure of the Strait of Hormuz, following overnight US airstrikes on Iranian nuclear sites. Strait of Hormuz is the world’s most sensitive oil shipping chokepoint.

Iran's state media has reported that the vote, though largely symbolic, grants authority to the Supreme National Security Council to move forward with the proposed measure.

While no immediate steps are expected, the move underscores Tehran's determination to respond to what it has described as a clear act of U.S. aggression, reports The Gulf News.

Why It Matters: The recent escalation in US-Iran tensions has significant implications for global oil markets. The potential for a wider conflict could disrupt oil exports from the Persian Gulf, a critical region for global oil supplies.

This could lead to a surge in oil prices, affecting economies worldwide. Particularly, China could face significant challenges as the main buyer of Iran’s oil exports.

On the other hand, the US could be less affected due to its increased domestic oil production. However, the situation remains fluid, and the long-term impacts are still uncertain.

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