Walker sees four main possibilities, ranging from somewhat benign to extremely costly.
We summarize them quickly here.
- Scenario #1: EU sanctions get put into place starting July 1, resulting in 0.6 million of barrels per day coming off the market. In this case, Brent Crude would rise to about $130/barrel, though possibly less, since the embargo might make exemptions for some distressed buyers of Iranian oil, like Italy and Greece.
- Scenario #2: Full EU sanctions are put in place, plus there’s another 10% cut from other customers. In this case, we’d be talking about oil going to $138/barrel.
- Scenario #3: Iranian crude exports are halted entirely, perhaps as a result of an Israeli air strike. Then we’re talking about a loss of 2.5 million barrels per day of supply, and Brent Crude prices up around $205.
- Scenario #4: The complete shutdown of Iranian oil. This would require some kind of military action and wide internal upheaval. In this case, the world would lose 4 million barrels per day, and we’d see crude as high as $270 per barrel.
Read more: BI
- The 10 Countries That Would Get Screwed In An Iranian Oil Shutdown (businessinsider.com)
- What Happens if Iran Does Close the Strait of Hormuz? $440 Oil? (247wallst.com)
- Iran stops oil sales to British, French companies (mb50.wordpress.com)
- SHIPPING CEO: Iran Could Send Oil To $440/Barrel (businessinsider.com)
- Four Scenarios For Engaging Iran At The Strait Of Hormuz (businessinsider.com)