Lately, geopolitical risk has been on the rise with renewed tensions in the Middle East. The US cold relationship with Iran has deteriorated further lately, with US strikes on facilities used by Iran’s military and aliased groups in Syria. There is a risk that the war between Israel and Hamas could spread to involve other neighbouring countries such as Lebanon, Syria and Iran. Such a broadening of the conflict would likely impact global shipping routes and could lead to new spikes in oil and gas prices. In particular, shipping through the Strait of Hormuz could get affected if Iran gets involved. This is a key shipping route where about 1/5 of global oil and LNG demand flows on a daily basis. A larger conflict could therefore lead to an energy price spike similar to the one after Russia’s invasion of Ukraine in 2022 or in 1970s.
- Nordea
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