Mideast Shipping Risks Seen Elevated Amid U.S.-Iran Tensions - Bloomberg:
The risk to shipping in one of the world’s key oil-producing regions is set to rise following a U.S. airstrike in Iraq that killed a top Iranian commander, just months after spiking to record levels on heightened geopolitical risk.
Iran vowed “severe retaliation” for the attack that killed General Qassem Soleimani, who led the Revolutionary Guards’ Quds Force. The episode ratchets up already-high tensions in a region that exports much of the world’s oil. Brent crude prices jumped as much as 4.9% in intraday trading.
“Whenever there’s tension in the region, the risk premium increases,” said Olivier Jakob, managing director at Petromatrix GmbH.
In October, daily earnings for supertankers on the benchmark route to China from the Middle East soared to more than $300,000 a day, after Iran said missiles hit one of its vessels in the Red Sea. That followed attacks on Saudi Arabia’s oil infrastructure a month earlier. U.S. reimposed sanctions on Iran in late 2018, and separate American sanctions on some vessels from China also contributed to an increase in shipping rates last year.
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