Iran Lacks the Capability to Shut Strait of Hormuz: RBC

It’s too soon to fade the Iran-Israel tension story at present despite the lack of upwards price action for oil this week according to RBC’s head of commodity research Helima Croft speaking with CNBC.

• “I think market participants have decided that this chapter of this war story is over for now.” Croft said.
• Croft says she expects the Israelis “to be patient in terms of their response” but you could “see some significant retaliations, its too soon to fade this war story.”
• “The U.S. said it would not support offensive operations, but the expectations obviously would be the U.S. would need to support Israel’s defense,” she said.
• “The Biden Administration has been very concerned about getting dragged into a wider Middle East conflict, they have been very concerned about this expanding to Iran and very concerned about energy prices” she added.
• RBC analysts said that Iran lacks the capability to close the Strait of Hormuz. Instead, Iran may replicate the 2019 playbook of attacking tankers, pipelines and critical energy infrastructure. The Houthis could pose a significant risk to those assets too.