What does not happen to the Middle East is more important: Russell | Einsmark news

(The views expressed here are those of the author, a columnist for Reuters.) By Clyde Russell Launceston, Australia, June 16 (Reuters)-It is often more important in times of increased tension in the Middle East to look at what does not happen, rather than lying on the dramatic main lines of Tit-for-Tat Air and Iran. From a perspective of the oil market, it means that it focuses on the fact that so far there is no one of the crude oil offering, and it is also in the interests of all parties that this remains the case. Rough oil prices rose again in early trade in Asia on Monday, with Brent’s global measure rising 2.1% to trade at $ 75.76 a barrel. It built on the 7% jump on June 13, which brought Brent to the highest in almost five months, while Israel launched a series of drones and air strikes that killed several top irans commanders and nuclear scientists and damaged core facilities. But it is noteworthy that the reaction of physical oil prices in the Middle East is more measured than in the paper market. The price of Dubai Swaps, which is a contract that is at the physical prices of Dubai RU, increased by 5.8% on June 13 to end at $ 71.03 a barrel. The profit of $ 3.86 a barrel for Dubai Swaps contrasts with the $ 4.87 jump for Brent contracts. This smaller profit for physical oil is perhaps a sign that traders and refineries are slightly less concerned about an offer than the paper investors in Brent. Although physical oil prices have risen less than paper, both still had strong increases, which is a rational response to rising conflict, especially as it shows little sign of cooling, with Israeli attacks and Iranian rocket pigs continuing. But for oil markets, the key or the risks of attacks on Iran’s crude production and export infrastructure are, and that Iran is trying to block the street of hormuz is realistic or threatening. The narrow hormuz channel between the Persian Gulf and the Gulf of Oman, and the Indian Ocean, bears about a fifth of the world’s daily oil consumption of up to 20 million barrels per day (BPD). This is the route that OPEC members use Saudi Arabia, the United Arab Emirates, Kuwait, Iraq and Iran for most of their rough and product exports, and there are few viable alternatives. It is also the route used to perform liquid natural gas by Qatar, the world’s second largest sender of super-cooled fuel. However, it is also noteworthy that the sea street has never been blocked in all the conflicts in the past that hit the Middle East, although there were cases where Iran was on board and tankers kept. It can also be argued that the best option for Iran is currently to have the market think about the risks of transporting through hormuz, which holds a premium in the oil price, while actually doing nothing to close the waterway. Hormuz risks, but what would happen should Iran look for what can be called a nuclear option and try to close the waterway? This would prevent Iran from exporting any crude as well as the other countries, and it would almost surely draw other powers to the conflict. The United States may act to keep the waterway open, and Iran will also sacrifice the goodwill it has under its neighbors in the Gulf, as well as with China, the world’s largest crude importer and in fact the only great buyer of Iran’s sanctioned oil. China is not engaged in speaker diplomacy, but that does not mean that it does not disclose his views on both sides in the conflict, and Beijing would like to see a rapid unbundling. The United States tends to publicly disclose its views, although it is often somewhat confused, given President Donald Trump’s habit of talking about the cuff and contradicting his own senior officials. But the message from Washington also seems pretty clear that they will help Israel defend itself and only enter the conflict if Tehran attacks American staff or interests directly. Israel has also limited itself to the attack of only domestic Iranian energy infrastructure such as refineries and storage tanks, measures aimed at making life more difficult for Iranians, but not to harm the production and export of crude oil. It is not to reduce the risks of crude offering in the Middle East, but it is rather to admit that even dramatic situations in the past have eventually relieved limited supply disruption and tension. Do you enjoy this column? Look at Reuters Open Interest (ROI), your essential new source for global financial comments. ROI delivers thoughtful, data-driven analysis of everything from exchange rates to soybeans. Markets move faster than ever. ROI can help you keep track of. Follow ROI on LinkedIn and X. The views expressed here are those of the author, a columnist for Reuters. (By Clyde Russell; Editing by Christopher Cushing)