Oil futures jumped as the market reopened Sunday night, building on last week's surge after Israel attacked Iranian energy facilities over the weekend and underlining fears around potential disruption to Middle Eastern crude flows.
Oil prices jumped in early Asian trade on Monday after Israel and Iran launched fresh attacks on Sunday, heightening fears that escalating battle could trigger a broader regional conflict and widely disrupt oil exports from the Middle East.
Israel hit two natural gas processing facilities in Iran as well as an oil depot.
The greatest risk the oil markets face is that Iran retaliates against Israel airstrikes by closing the Strait of Hormuz, which is critical to global energy shipments.
Tensions at the Strait of Hormuz risk 20M bpd in crude oil flow, fueling a sharp rally in oil futures and boosting market volatility.
Sam Stovall thinks oil prices can move over $100 a barrel, with a base case of $65/barrel. Looking at stocks, he says that the ones that are “most beat up” tend to see the biggest rebounds, and points to a few potential opportunities.
Almost a third of the global seaborne oil trade moves through the Strait of Hormuz. Any interruption could send crude prices soaring.
Centerview Partners Senior Counselor Richard Haass says that while geopolitical tensions cause fluctuations in prices, there would have to be ongoing conflict to see a sustained upward move in oil prices. -------- More on Bloomberg Television and Markets Like this video?
Helima Croft, RBC, joins 'Closing Bell Overtime' to talk the state of the crude oil market amid rising tensions in the Middle East.
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