Global oil prices stabilize, but plenty of risks remainーNHK WORLD-JAPAN NEWS
one of the things hit by the shock waves of the shooting march in the Middle East was global oil prices crude prices have stabilized for now but some experts warned that the risk is not completely gone yukov Kushima from our business desk joins us now to tell us more well global oil prices have been on a roller coaster ride over the past two weeks that was as tensions boiled over as Israel and Iran traded blows with the United States also getting involved brent futures a benchmark for oil prices rose sharply as Israel began what it called preemptive strikes against Iran and Iran soon hit back on June 22nd the index hit a fivemonth high but once President Trump posted about a ceasefire between the two countries prices quickly retreated the conflict has affected households here in Japan on Monday the average price of regular gasoline at the pumps rose for the first time in nine weeks the government said it was ready to implement relief measures to bring prices down the industry minister said steps could be taken if oil shipments are delayed as a result of the straight of hormuz being blocked if the need arises we will consider using oil reserves we will deal with the situation appropriately at an appropriate time the straight of Hormuz is a narrow passage located to the south of Iran that connects the Persian Gulf and the Arabian Sea it is a vital route for oil and gas tankers delivering supplies to the destinations around the world the US government says about 20% of global oil supplies pass through the street it is critical for Japan which relies on the Middle East for about 90% of its oil global oil industry expert Nimura Nao warns that although the situation has calmed we should not forget the risks however small Nimura predicts brand futures could quickly shoot up from around $65 per barrel now if the straight is blocked for example half of the Persian Gulf is under the jurisdiction of Iran so if Iran says it will stop all ships passing through its waters that would reduce shipping traffic by half that could lead to Brent prices rising to about $100 if the Persian Gulf is totally closed off I think the price will surge to an average of $130 but looking at developments in the Middle East I think the possibility of this happening is below 10% but Nimmuda points out there are other risks that could also drive prices up if Israel and Iran start firing missiles at each other again there could be a miscalculation the missiles could land on an oil exporting base or they could accidentally hit a passing ship companies might then think they can’t allow their tankers to pass through the straight ships would not be able to deliver oil and that would lead to higher prices looking ahead Nimura says more factors weigh in favor of prices rising than those in favor of them falling the US will hold a midterm election next year so the government will probably not do anything to slow the economy and in China I don’t see the economy worsening the government needs to keep its grip so it is using financial tools to maintain the current state of the economy nimmuda also sees a scenario in which the global economy could perform better than expected president Trump has been imposing tariffs on countries around the world but he could suddenly ease them or lower them the global economy could then briskly heat up but oil might not be produced quickly enough to keep pace with the economic upturn so both politics and the economy are chocked full of uncertainties and that means movements in oil prices will likely be very difficult to predict
Global oil prices have been on a roller-coaster ride due to Middle East turmoil. Ongoing political and economic uncertainties mean that many risks remain. #business #oil
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