Iran: Strait of Hormuz, US allies and prediction markets - Reuters

<a href="https://news.google.com/rss/articles/CBMiiwFBVV95cUxQYy1ScWMxSVlkM3dVMTBWakNxUmhzLXdJN1VJOGhWQmR6cU1sVGNRSnR1NEUtQVNQLUFJSkl2dV9xdHdjUUJYVFh4dkJ5aE5fZG11SlJIYXByOTFENUZBSTlHWnI5YUlpcTVFQkJpM0tFMXlXUDVHazRtcTJyNW5RLW16N2V2a1VIN1BR?oc=5" target="_blank">Iran: Strait of Hormuz, US allies and prediction markets</a>&nbsp;&nbsp;<font color="#6f6f6f">Reuters</font>

Oil prices are expected to experience volatility in the coming week due to uncertainty surrounding U.S. and Israeli strikes and their potential impact on Middle Eastern oil supplies. Before the conflict, market scenarios predicted a temporary spike in oil prices unless critical infrastructure or shipping routes, like Iran’s pipelines or the Kharg island terminal, were affected. A greater disruption—especially to tanker traffic in the Strait of Hormuz, which handles 20% of global oil flow—could lead to prolonged price increases.

Oil prices surged by the most in four years as the killing of Iranian supreme leader Ayatollah Ali Khamenei amid a widening conflict between the United States, Israel, and Iran brought tanker traffic through the Strait of Hormuz to a near standstill. Freight costs climbed sharply alongside crude, as traders swiftly priced in the war, which analysts say will have far-reaching consequences for Asia’s heavily import-dependent economies.

Following US and Israeli strikes on Iran, concerns have grown that the Strait of Hormuz could face disruption—a development analysts warn could push oil prices toward $100 per barrel. Tanker operators and major energy firms have temporarily suspended shipments of crude, refined fuels, and liquefied natural gas through the waterway after Tehran cautioned vessels about transiting the area.

On Kalshi, over 37% of the bettors think the Strait will be closed before 2027, while 35% and 29% of the traders think the closure could come sometime before August and May this year, respectively. Experts have warned that any closure of the Strait could lead to oil prices surging exponentially, with analysts at ING predicting that any disruptions to the global oil supply chain could lead to prices topping $140 a barrel.

The widening conflict in Iran is shaking financial and energy markets worldwide as tankers in a key shipping corridor are targeted and oil prices begin to soar, threatening to escalate the affordability crunch facing U.S. voters.

On Kalshi, over 37% of the bettors think the Strait will be closed before 2027, while 35% and 29% of the traders think the closure could come sometime before August and May this year, respectively.

Oil prices jumped sharply after a major US-Israel military operation against Iran over the weekend escalated geopolitical risk across the Middle East. Iran responded with missile strikes on Israel and on countries hosting US military bases, including Saudi Arabia, the UAE, Qatar, Bahrain, Jordan, and Kuwait. As a result, Brent crude surged more than $5/b in early trading, briefly moving above $82/b before easing. The widening front-month spread signals immediate physical tightness and a rising geopolitical risk premium.