Oil: Supply risk focus and strategic reserves – Danske Bank

Danske Research Team notes that recent Middle East tensions have kept Oil in focus. The bank highlights that markets still mainly view the Iran conflict through energy supply risk, especially potential disruptions through the Strait of Hormuz, and flags possible US strategic reserve sales if Oil price pressures persist.

Energy markets weigh Hormuz disruption risk

"In energy markets, energy prices stabilised despite escalating Middle East tensions, as the conflict widened beyond the Gulf after a US submarine sank an Iranian warship off Sri Lanka and NATO intercepted a missile headed for Turkey."

"Weekly US oil inventory data showed no purchases for strategic reserves last week, though the US may consider selling reserves if oil price pressures persist."

"Given the magnitude of the geopolitical shock originating from Iran, the relatively contained reaction across risk assets reflects that markets continue to frame the conflict primarily through the lens of energy supply risk, specifically the potential disruption of oil and gas flows through the Strait of Hormuz."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)