Iran conflict will rile energy markets, not break them

The oil market is well placed to manage the impact from Iran. The market is well supplied, and Iran is unlikely to sustain disruption that is both severe and prolonged, making a full-blown oil crisis unlikely.

What you will learn in this report:

• We now assume oil supply is disrupted by an average of 4 mbpd over the next quarter and expect Brent to average $79 per barrel in Q2, $15 above our February baseline, before easing as supply resumes by the end of the quarter.
• Trade rather than production disruption is the key risk: spare capacity in Saudi Arabia and the UAE can offset lost Iranian production, but alternative trade routes can reroute only around a third of normal Strait of Hormuz oil flows.
• Gas markets are more exposed because buffers are weaker. Qatar, the world’s second-largest LNG exporter, has no alternative route that bypasses the Strait.

Download our report to learn more.