Iran’s parliament has endorsed closing the Strait of Hormuz, a vital oil transit point off its coast, but analysts are skeptical about the threat from a body without authority to close the strait.
Why it matters: Impeding the strait would likely bring a massive spike in oil prices that would flow through to U.S. consumers.
- The narrow channel between Iran and Oman is the chokepoint for a quarter of the world’s seaborne oil trade — and around one-fifth of all oil movements.
- Without diplomatic concessions from Tehran, the front-month Brent crude oil price could open “meaningfully above its $77.01/bbl Friday close,” ClearView Energy Partners said in a Sunday note.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
