Oil markets and geopolitics

Key takeaways:

– Iran is still an important oil producer despite years of sanctions and strained relations with the west.

– If the direct attacks between Israel and Iran happened twenty years ago, the effect on oil prices would have been much bigger than today. Despite the seriousness of the situation, oil prices were barely impacted.

– This reflects the level of transformation oil markets have gone through in recent years.

– The absence of supply disruptions and comfortable spare capacity in the system have also dampened the impact of geopolitics.

– Iranian oil exports in Iran have reached a 6-year high, indicating that Iran is still able to bypass sanctions or/and the enforcement of sanctions have become more lenient particularly since the Biden Administration took office. China is Iran’s largest buyer of oil.

-Even amidst the maximum pressure exerted by the US under Trump’s administration, Iran continued to export half a million barrels of oil per day (mb/d).