If the United States had acted a couple of decades ago to bomb Iran’s nuclear weapons program, as it did on Saturday, oil prices would have soared. But even though prices might jump when trading resumes this week, the longer-term effect is far less clear.
Oil traders must weigh whether the American attack will lead to wider fighting that harms exports from the Persian Gulf, said Muyu Xu, senior Asia crude oil analyst at Kpler, a global commodities and shipping data firm.
Wider fighting could drive up prices if oil-loading facilities are damaged or tanker traffic is interrupted. There have been no major disruptions so far since the Israel-Iran conflict escalated this month, though Israel’s air attacks did set fire to a refinery and refined products depot supplying Tehran.
“Until now, we haven’t seen a single barrel removed from the market,” Ms. Xu said.
Military action by Iran to interrupt the flow of oil would mostly harm China, which is closely aligned with Iran and buys nearly all of Iran’s oil exports.
Oil prices have risen about 10 percent since the recent eruption of hostilities, which began with a surprise attack on Iran by Israel on June 13. They fell on Friday after President Trump said he would decide within two weeks whether to enter the war against Iran.
Ever since the Iranian Revolution in 1979, American policymakers worried that Iran might act against the United States by using mines or missiles to block tanker traffic through the Strait of Hormuz. The strait is the entrance to the Persian Gulf, through which a sixth of the world’s oil moves on tankers, and the northern side of the strait is Iran’s coastline.
China buys a third of all oil coming out of the gulf, according to Kpler’s data, and helped broker a rapprochement two years ago between Iran and Saudi Arabia, another big exporter of oil from the Persian Gulf.
By contrast, the United States buys less than 3 percent of the oil coming out of the Persian Gulf, notably from northern Saudi Arabia. The United States became an overall net exporter of oil in 2020 as fracking technologies enabled a big increase in domestic oil production.
Iran’s oil exports have declined steeply in recent years, although there was a partial rebound last year as China stepped up purchases from Iran following the rapprochement with Saudi Arabia. The United States and Europe have imposed broad prohibitions on the purchases of Iran’s oil so as to pressure Tehran to abandon its nuclear weapons program.
China has bought Iran’s exports at a deep discount to world prices. Beijing leaders have long contended that the sanctions against Iran are not binding on China because the United Nations has not endorsed them.
Even more unclear is what could happen to Iran’s oil long-term oil exports. The sanctions that have curtailed much of Iran’s exports were aimed at forcing it to stop developing nuclear weapons.
Keith Bradsher is the Beijing bureau chief for The Times. He previously served as bureau chief in Shanghai, Hong Kong and Detroit and as a Washington correspondent. He has lived and reported in mainland China through the pandemic.
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