Despite Iran intensifying attacks on tankers in the Strait of Hormuz, oil shipments through the strait and alternative routes averaged more than 24 million barrels a day last week, compared with 23.3 million before the United States and Israel launched the war in late February. Pipelines bypassing the strait, lucrative shipping premiums and weaker demand, particularly in China, have contained the crisis, with some Middle Eastern oil now selling below its price a month ago. JPMorgan said demand destruction could keep oil near $90 per barrel despite a lasting supply constraint, well below the $120 to $140 levels feared by some forecasters. Saudi Arabia plans to convert a natural gas pipeline to carry 1.2 million barrels of oil per day to its west coast, while the United Arab Emirates is expected to complete a second pipeline to Fujairah. This resilience depends on the escalation remaining limited, as Iran has threatened to retaliate against U.S. and Israeli strikes on energy infrastructure, potentially triggering mutual destruction of oil terminals.
Source: Read the original article
