Israel Attack a "Calibrated Response": Energy Aspects

An escalation between Israel and Iran is not the base case for oil with attacks still appearing orchestrated after the most recent strike according to Energy Aspects Director of Research Amrita Sen.

• “I think the spike [Friday morning} was on headlines, you always seem to get that reaction,” Sen said.
• “The way they have responded, it’s very much saying to Iranian leadership, should we choose to attack, we can – it’s a warning sign more than anything else,” Sen added.
• “It’s a calibrated response and not likely to escalate the situation any further,” she said.
• “On a fundamental basis, we have been calling for a pullback in the near-term, it’s just seasonally a softer period,” she said.
• Sen said the demand fundamentals really start to kick in during the summer months and expects over 2mn bpd of stock draws.
• “We don’t see [the closure of] the Strait of Hormuz as a risk, simply because Iran uses the strait too to sell their oil, over 1mn bpd that they are selling to China,” Sen said.
• “We can’t rule out the possibility of miscalculation [between Iran/Israel] but that’s not the base case, the base case is that flat price remains relatively supported,” Sen added.