New Delhi: Global oil prices declined to $70 per barrel following Iran’s retaliatory strike against the United States, which analysts see as a potential de-escalation move amid continuing geopolitical tensions in West Asia.
According to Rystad Energy, Brent crude rose to nearly $78 per barrel after Israel’s Operation Rising Lion on June 13, targeting over 100 Iranian nuclear and military facilities. It later stabilised at $75 before falling to $70 following Iran’s missile response targeting Doha.
“The geopolitical risks that have loomed over the Middle East for months have now fully materialised, prompting a rapid repricing in the oil market,” said Janiv Shah, Vice President, Oil Markets Analysis, Rystad Energy.
Rystad warned that market volatility would remain high in the short term until the extent of the damage and Iran’s subsequent response become clearer.
A potential disruption of the Strait of Hormuz, through which about 15 million barrels per day (bpd) or nearly a third of global seaborne crude exports transit, poses a significant risk to energy markets. Asia, which receives nearly 80 per cent of these flows, would be most affected, the report said.
Iran’s Parliament has passed a motion authorising the potential closure of the Strait, though the decision rests with the Supreme National Security Council. Rystad said a complete blockade remains unlikely at this stage, but any perceived threat is likely to raise insurance costs and operational risk premiums.
In the gas segment, Lu Ming Pang, Senior Analyst, Gas & LNG Research, Rystad Energy, said around 20 per cent of global liquefied natural gas (LNG) exports pass through the Strait. Countries including India (66 per cent), Bangladesh (69.2 per cent), China (34 per cent), Thailand (21 per cent), South Korea (16 per cent), and Japan (5.61 per cent) depend significantly on Qatari and UAE LNG, which transit through Hormuz.
“Should there be a disruption in supply, these buyers will have to seek additional volumes from other suppliers, which will drive up the price of spot LNG,” Pang said.
He added that Qatari contracts and deliveries generally have limited flexibility, and disruptions are more likely to cause delays than outright cancellations unless Force Majeure is invoked.
Claudio Galimberti, Chief Economist, Rystad Energy, said that Iran’s missile strike may be perceived as a de-escalation attempt, which has led to a softening in oil prices. However, two possible scenarios are being monitored by market participants.
In the first scenario, the strikes may have destroyed Iran’s nuclear stockpile, which could open the way to diplomatic engagement and reduce risks to oil and gas infrastructure. In the second, Iran may have protected its key assets, potentially resulting in further military action by the US and Israel.
“In the second scenario, the likelihood of a broader and more prolonged conflict increases,” Galimberti said.
Rystad noted that shipping disruptions are already visible, with GPS jamming, cyber interference, and rising insurance premiums being reported. Container and dry bulk traffic have declined, though tanker flows have increased as Iran ramps up exports ahead of further escalation.
The Strait of Hormuz remains a critical chokepoint, and any disruption could impact global energy flows. According to Rystad, the waterway’s strategic significance means that a full closure would require significant effort and coordination and would likely trigger international responses, including from China, Iran’s largest crude customer.
OPEC+ is expected to monitor the situation. Saudi Energy Minister Prince Abdulaziz bin Salman said the group would “only react to realities, not hypotheticals,” in response to questions on supply adjustments.
Rystad Energy stated that while oil and gas markets have currently priced in a de-escalation signal, the evolving situation will continue to affect prices as long as the geopolitical risk remains elevated.
