Summary
Over the weekend, oil prices rose to a five-month high after the US attacked Iran's nuclear sites, and Iran responded by targeting a US air base in Qatar. However, on Tuesday, oil prices dropped because Iran paused further attacks and did not close the Strait of Hormuz, a crucial route for global trade.
Key Facts
- The US attack on Iran's nuclear facilities caused oil prices to rise sharply.
- Iran responded by attacking the US Al Udeid Air Base in Qatar.
- Oil prices fell on Tuesday when Iran paused further military actions.
- The Strait of Hormuz is essential for global oil trade, handling 20% of the world's oil supply.
- Iran's parliament proposed closing the Strait, but the final decision is up to the Supreme National Security Council.
- If the Strait is closed, oil prices could rise significantly, with potential forecasts of $80 to $110 per barrel.
- There is extra oil production capacity in Saudi Arabia and the UAE, which can temporarily lessen any supply issues.
- Iran produces 4% of the world’s oil, with China buying nearly 90% of it due to global sanctions.
