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OIL: Risk to 1.5mb/d Oil Supply from Major Strike on Iran Infrastructure: Citi

OIL
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Crude supplies of 1.5mb/d could be taken off the market from a major strike on Iran’s oil-exporting capacity by Israel, according to Citigroup cited by Bloomberg.

  • Israel strikes on minor oil infrastructure, such as downstream assets, storage facilities and minor export valves could cut output by 300kb/d-450kb/d.
  • There is a “low probability, high-impact tail risk” of Iran attempting to close the Strait of Hormuz which would be “tipping point for the global oil market and the world economy.” The closure scenario could result in a “significant spike well past previous record highs.”
  • Iran targeting foreign vessels in the Gulf could cause sporadic, small losses of as much as 1.9M bbl, depending on vessel size.
  • Citi maintains the view for renewed downside pressure as 2025 approaches once geopolitical tensions ease.
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Crude supplies of 1.5mb/d could be taken off the market from a major strike on Iran’s oil-exporting capacity by Israel, according to Citigroup cited by Bloomberg.

  • Israel strikes on minor oil infrastructure, such as downstream assets, storage facilities and minor export valves could cut output by 300kb/d-450kb/d.
  • There is a “low probability, high-impact tail risk” of Iran attempting to close the Strait of Hormuz which would be “tipping point for the global oil market and the world economy.” The closure scenario could result in a “significant spike well past previous record highs.”
  • Iran targeting foreign vessels in the Gulf could cause sporadic, small losses of as much as 1.9M bbl, depending on vessel size.
  • Citi maintains the view for renewed downside pressure as 2025 approaches once geopolitical tensions ease.