Rising tension between Iran and the West is increasing political and economic risks for sovereign and corporate issuers in the Middle East and focusing attention on the key role of the Strait of Hormuz in trade for the Gulf, says Standard & Poor's Ratings Services in a series of three new reports (see list of publications below).
In response to tougher sanctions, including a boycott of Iranian oil exports by the EU, Iran has threatened retaliation, notably in the form of a blockade of the Strait of Hormuz, a conduit for the flow of oil and gas out of the Gulf.
So far, these threats have been verbal, but analysts are not ruling out the possibility that the current exchanges of rhetoric could spark disruptions to trade flowing through the Strait, or even in an extreme scenario, military confrontation.
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