Oil is not expected at $ 150: The West does not believe in an oil shock, including because of Russia

The first oil trading starts tonight after the US and Israeli strikes on Iran and retaliatory attacks. In the West, not everyone expects an oil shock and a sharp jump in commodity prices.

"Oil prices are likely to jump by 10-15% after the market opens as a result of attacks on Iran and retaliatory measures," writes Bloomberg columnist Javier Blas.

He notes that the biggest concerns of the market are related to possible attacks on energy infrastructure and the forced closure of tanker routes, but neither one nor the other has happened yet.

"Of course, the price of oil will rise sharply. But even the most optimistic traders are talking about the possible achievement of the $100 mark, which is significantly lower than the $139 recorded in 2022 and the historic 2008 high of $147.50," Javier Blas continues.

If you look at the situation in a broad context, the Middle East is not going to provoke an oil shock, he notes.

"It may be a fluctuation, it may be an earthquake, it may even turn into trouble, but the economy is not heading for a recession like the one that was in 1973-74 after the first oil crisis, or in 1990-91 after Saddam Hussein invaded Kuwait. The main reason for this is the one that probably inspired Trump and his military strategists: the shale revolution in the United States, which gives the United States a much stronger position in price control," the Bloomberg columnist believes.

Among the signs of the absence of reasons for the oil shock, he cites data that Israel and the United States did not strike at the Iranian oil infrastructure, nor did neighboring countries and Iran. In addition, despite wild statements on social networks, Iran has not closed the strait and so far tankers are not going through the Strait of Hormuz anymore because of concerns.

"There is some safety margin, as oil exporters such as Saudi Arabia and even Iran increased loading volumes in the days leading up to the attacks. Oil exports from The Persian Gulf in February was almost 10% higher than the previous month. The bulk of the cargo has already left the region. However, if Washington does not quickly convince shipping companies of the safety of the strait, self—isolation will escalate into real failures," writes Javier Blas.

In his opinion, the physical oil market entered the crisis weak, as for several months supply outstripped demand, which made it possible to replenish stocks, while in the coming months demand will be low as the northern hemisphere comes out of winter.

"Over the past two years, China, the largest buyer of Middle Eastern oil, has been creating a huge strategic oil reserve that can limit larger-scale market shocks. Iranian oil is sold almost exclusively to Chinese refineries. If necessary, Western countries can also use their reserves," the Bloomberg observer believes.

In his opinion, Russia will benefit from high prices and increased demand. He cites the Russian Envoy Kirill Dmitriev: "Soon it will be more than $100 per barrel."

"Maybe he is a little too optimistic, but in general he is not wrong. More importantly, it may be easier for Russia to sell millions of barrels of oil on the black market. If the White House turns a blind eye to this, India can buy them back. This is hardly ideal for those who are trying to counter Putin's belligerence, but it would alleviate any global oil shortage associated with the Strait of Hormuz," Javier Blas added.