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By Robin HAWORTH, Equity Research Analyst, Energy Sector, Lombard Odier
While attention is focussed on the Strait of Hormuz, China’s demand for crude oil may prove key for prices this summer. We look at changes to the energy market in response to the Middle East conflict, and how price dynamics could evolve from here.
Two weeks after the US and Iran’s memorandum of understanding, Brent crude oil prices have retreated close to pre-conflict levels, at just over USD 70/barrel. The reopening of the Strait of Hormuz is proceeding broadly in line with our expectations, as prior flows slowly return. Stranded ships are exiting the waterway, although mine clearing the main channels may take several more weeks, as will the recovery of pre-war tanker...
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