Iran tensions could drive Brent crude above $80 this summer

30 May, 2019

Iranian President Hassan Rouhani announced his country would end its compliance with two particular conditions of the nuclear deal if Europe did not step in to protect the country from U.S. sanctions.

Tehran has previously threatened to close the Strait of Hormuz, the world’s busiest transit lane for seaborne oil shipments. Approximately 20% of all seaborne crude and condensates passes through the Strait of Hormuz.

Hormuz isn’t the only waterway to look out for in pricing oil this year. There’s another waterway to watch — what happens off the coast of Yemen?

Some strategists suggested the geopolitical possibilities of Iran restarting its nuclear program and tensions around key strategic waterways could be key in escalating prices. ‘RBC Capital Markets’ currently has Brent crude projected to average $75 a barrel for 2019, moving into the low $80s over the summer.

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