Energy markets are in a period of high uncertainty amid disruptions to oil and gas flows through the Persian Gulf. New research from ING evaluated pathways for duration and severity of the current supply shock.
The bank’s commodities team warns that the complex risk around the Strait of Hormuz — a critical chokepoint for global energy trade — means markets must now prepare for a longer period of constrained supply and elevated prices.
“There are few signs of de-escalation or a resumption in energy flows from the Persian Gulf,” said Warren Patterson, Head of Commodities Strategy at ING. “The market is having to reprice the duration of ongoing supply disruptions.”
And, if the conflict drags on and attacks keep choking Hormuz shipments, oil prices could surpass 2008 highs and spike to new record levels, according to the Dutch bank.
Inefficient Spare Capacity
The disruption is already significant. Around 8 million barrels per day of crude production have been shut in so far, while up to 15 million barrels per day of oil flows remain affected even after accounting for pipeline routes that bypass the Strait of Hormuz.
ING argues that the scale of the disruption makes …
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