Oil futures recouped all of their 0.5% losses, that occurred as a result of credit rating cuts for more European countries, by growing 0.7% as tensions over Iran’s nuclear programme and possible disruption in the Strait of Hormuz continue to cause supply worries.
Though Iran is unlikely to (and according to the US Navy, incapable of) blocking the Strait of Hormuz for any period of time, the increasingly isolated nation may resort to other methods. Strategists have suggested that it is likely that Iran will resort to “low level provocation”, including the slowing and compulsory inspection of ships travelling through the Strait.
Oil prices continue to be propped up by tensions in the region with some analysts pointing out that some kind of armed conflict is still a “real, if remote, possibility.”
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