Israel-Iran conflict causing uncertainty in oil market, jacking up prices: Peter McGuire

Peter McGuire, CEO, Australia, Trading.com, says the ongoing conflict between Israel and Iran introduces uncertainty into the oil market, independent of OPEC’s decisions. The situation’s magnitude and impact necessitate constant market reevaluation. Currently, WTI is over $74 and Brent is around $75.25, with potential for further price increases by the next trading day.

What is your take on crude oil because with the tensions rising between Iran and Israel, we are already seeing a 10% jump. But this particular attack impacts the supply chain as it impacts one of the key routes for the supply of the oil. How do you see the situation escalating and its impact on the oil prices?
Peter McGuire: There’s a couple of things. The Strait of Hormuz is an integral part, a true choke point when it comes to energy transportation and the impact that that can have across the whole Persian Gulf. So, the market is up now as you said 9-9.5%. We have got to see how this moves forward over the next couple of days and whether there was to be any form of interaction from the US because they have got many carriers around that sort of area and whether they were to be involved or if there is any chance as far as production not being able to be shipped through there. That choke point remains shut and that is going to force prices much higher. That is the issue we face at the moment. It is the degree of uncertainty.

Give us a sense of these elevated crude prices that we are seeing right now. Would OPEC step in sooner or later in terms of some price correction now because we have had the OPEC secretary say a few days ago that he is not seeing a peak? Could the oil market peak given the sharp uptick that we have seen this morning?
Peter McGuire: I am not sure how much further it can go, as far as it depends on the escalation in the conflict between Israel and Iran. OPEC has got its own mind. They would not have been aware of this to play out and the magnitude that it has and the impact that it has. So, every hour that rolls forward is another new lens that you have got to look at the markets with.

At the moment, we are at $74 plus for WTI and $75-and-a-quarter or $75-and-a-third for Brent. We could be at that by Monday morning or this time tomorrow, I should say, when the market’s shut in New York,we could add a few dollars to where we are at the moment.