The entire world is holding its breath because of the armed conflict in the Middle East. After Iran’s attack on Israel, it remains to be seen whether there will be a military offensive in response – although for the moment they have focused on specific objectives such as the elimination of the Hamas leader. This situation causes an economic derivative that directly affects oil prices, where China’s role is also relevant to reduce tension. Thus, for the moment the impact is being quite limited. As explained by the manager Schroders, “the ability to generate OPEC surplus [la organización de países exportadores de petróleo] is currently very high, around five or six million barrels of oil per day, and this in a context of global oil demand of 102 million barrels per day. That could imply that a significant surplus of oil begins to emerge, something that reduces potential price increases. Related News It already exceeds 2,700 standard dollars Yes Gold shatters another record due to the drop in rates and the crisis in the Middle East Xavier Vilaltella The precious metal consolidates its prestige as a safe value in situations of geopolitical instability. In the last week, the price of a barrel of Brent has not exceeded $80, and for the moment it remains below. Thus, as the analysts explain, “one of the concerns of investors is the risk that Israel attacks the Iranian oil facilities in Kharg, in the Persian Gulf.” The key at the moment lies in the movements that may occur in the environment. of the Strait of Hormuz. What happens in this area of the planet can cause prices to rise “sharply.” It is not unreasonable to suggest that the price of oil could return to its all-time high of $147 per barrel, as the market would potentially lose 20% of its supply, analysts reveal. “We would have to see oil prices rise above $100 a barrel and stay there for an extended period of time for there to be a significant change in the inflation outlook or to pressure central banks to change their policy.” current interest rate policy. Stability? Despite everything, for the moment there is a certain tranquility. Analyst Manuel Pinto explains that “the market is not valuing the risk of a scenario in which we have a historic ‘shock’ in oil supply.” The current tense calm is due to the possible response of Israel, which for the moment seems to be holding back in the face of pressure from the US, which fears the rise in the price of oil and therefore gasoline days before the presidential elections, skewing the vote of many undecided.” In a scenario in which Israel attacked the Iranian oil terminal on Kharg Island, from where the Islamic Republic sends 90% of its production, “the world price of oil could skyrocket to around $90 per barrel, which is manageable for the markets,” explains Pintos. It is the same level that the price of oil was in April of this year. “In any case, oil-producing countries have demonstrated a remarkable ability to recover from supply outages, the 2019 attacks on Saudi oil facilities in Abqaiq and Khurais, which reduced supply by approximately 50%, lasted only a few days instead of the months that many had feared, and so did the Iraqi oil infrastructure of the 2003 US invasion,” the analyst recalls. Now, if the retaliation were different, and other oil fields were bombed, it would affect a large part of world production. «The outbreak of an all-out regional war, which closes the Strait of Hormuz, the shipping route for most of the Middle East’s oil, and where it is estimated that up to 40% of world production will pass by 2023, could double the price of oil,” says Pintos. Keys: US and ChinaIn any case, unlike other major crises, the US has become the largest oil producer in the world, so its dependence on Chinese oil The Middle East has drastically reduced, and therefore also that of the West, generating a lesser impact on the price of oil. In July 2006, the US extracted 6.8 million barrels of oil per day, while today, it extracts more than 20.1 million barrels, which could increase in the event of Donald Trump’s victory, and would still have the strategic oil reserves with which to combat the lower global supply. Related News standard No The International Energy Agency puts an end to the reign of fossil fuels José A. González Those responsible in their latest report celebrate the arrival of “the era of electricity»A country that could greatly suffer the consequences of this scenario would be China, which is estimated to acquire more than 70% of Iran’s total production. However, the Asian giant’s stimulus plans announced a few days ago do not seem to have inspired confidence in investors, nor does the lower demand predicted by OPEC for 2024 and 2025. This organization, which has been looking forward to reduction in production, foresees this lower Chinese consumption, a situation that is impacting prices in less pressure on supply. Economic impact Regarding its impact on the real economy, the analyst explains “as a general rule every increase of 10 dollars per barrel in the price of oil raises inflation by 0.2% and slows economic growth by 0.1%. In this way, gasoline prices would also be affected. We must remember that when we pay for gasoline or diesel, the most important elements in its calculation are the price of oil, taxes and distribution or marketing costs. Specifically, the price of oil represents between 40% and 50% of the total calculation of the price of gasoline. Therefore, a rise in the price of oil should be replicated in a lower intensity increase in gasoline. It would also affect core inflation. Although energy is not included directly, oil is an important raw material for the production of goods and services.
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