|Brent oil price could hit $200 a barrel if Iran nuclear facilities targeted||
Brent oil prices could well hit $200 a barrel on rising political tensions in the Middle East if occupying regime of Israel makes a decision to attack Iran’s nuclear facilities.
The main worry among crude oil traders is that Israel launches a unilateral surprise attack to try to destroy Iran’s nuclear facilities and that Iran retaliates by closing, even if only briefly, the oil flow through the Strait of Hormuz.
The strait is important because 15.5 million barrels per day of oil passes through it each day, equivalent to a third of the all seaborne traded oil.
The strait has added significance because all the world’s spare production capacity, the first line of defense against supply disruptions, is in Saudi Arabia, the United Arab Emirates and Kuwait.
These exports would be constrained if the gateway was closed.
“It is the $200 a barrel scenario.” says Philip Verleger, an independent consultant who correctly predicted in August 1990 the price rally after Iraq invaded Kuwait.
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