The information provided is of general nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information provided, you should consider whether the information is suitable for you and your personal circumstances and if necessary, seek appropriate professional advice. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Past performance is not an indication of future performance. Go Markets Pty Ltd, ABN 85 081 864 039, AFSL 254963 is a CFD issuer, and trading carries significant risks and is not suitable for everyone. You do not own or have any interest in the rights to the underlying assets. You should consider the appropriateness by reviewing our TMD, FSG, PDS and other CFD legal documents to ensure you understand the risks before you invest in CFDs. These documents are available here.
Any references to Australian or international shares, sectors, indices, ETFs, crypto-related stocks or other instruments are provided for market commentary and watchlist purposes only and do not constitute a recommendation, offer or solicitation to buy, sell or hold any financial product or adopt any investment strategy. International markets may involve additional risks, including currency fluctuations, regulatory differences, market structure differences, reduced liquidity and higher volatility. Company-specific, sector-specific and macroeconomic risks may also affect performance.
Commentary on geopolitical developments, economic data, central bank decisions, earnings, policy changes and other global or financial market events is based on information available at the time of publication and may change without notice. Such events can lead to sudden market moves, price gaps, reduced liquidity, wider spreads and increased volatility, particularly in leveraged products such as CFDs. Forward-looking statements, expectations and scenario analysis are inherently uncertain and should not be relied on as guarantees of future market behaviour or outcomes.
Oil: Hormuz risks and freight costs drive prices higher – Rabobank
Rabobank strategist Molly Schwartz discusses conflicting narratives around Iran-related tanker damage in the Strait of Hormuz and rising Oil flows from the Persian Gulf. Despite higher volumes, Schwartz stresses that insurance, freight and inefficiencies keep markets far from normal, with Brent futures at their highest since April and physical benchmarks trading at steep premiums to paper contracts.
Strait tensions and costly delivery
"The Associated Press reports that Iran says seven tankers have been damaged in the Strait of Hormuz which, if true, would surmount to the highest number of vessels attacked in the Strait since the war began."
"Indeed, two days ago the Wall Street Journal reported that “more oil is now coming out of the Persian Gulf than before the Iran War,” citing the success of the “Hormuz Shuttle” and that shipment from the Middle East has averaged “more than 24 million barrels a day in the week through Oct. 18, surpassing prewar levels of 23.3 million.”
"But despite the headlines, markets are digesting Iran’s assertion that the Strait is still dangerous, and Brent crude oil one-month futures closed yesterday at $113/bbl—the highest price since April."
“The ‘Hormuz Shuttle’ is boosting crude flows through transfers near Oman, but rising insurance costs, tanker inefficiencies and attacks mean markets remain far from normal."
"Persian Gulf–China freight rates have reached $1.4m daily, adding roughly $13.5/bbl and particularly burdening Asian refiners. Brent and Shanghai physical oil consequently command $10–25 premiums over futures. Higher volumes therefore do not guarantee cheaper delivered energy: the cost of delivery is getting so expensive that it threatens the recovery."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Related Articles
