Episode summary
Iran Escalates Attacks on Shipping; Oil Prices Keep Rising | Bloomberg Daybreak: US Edition
Bloomberg Daybreak: US Edition
· · 15 min
Summary
Oil markets remained under severe pressure as the Iran war entered its 13th day and attacks spread across shipping routes tied to the Gulf. The host said two tankers off Iraq were set on fire and that Oman evacuated vessels near a key export terminal, while the UK and Thai Navy reported separate attacks on vessels near the Strait of Hormuz. Brent and WTI were both up sharply, and the International Energy Agency said members would release 400 million barrels from emergency reserves, a record move that still looked too small to fully offset the shock.
A guest from Bloomberg Economics argued the key issue is duration, not intensity. He said the Strait of Hormuz handles about 20 million barrels a day, or roughly 20% of global supply, and warned that if the disruption lasts a month, oil could average about $105 a barrel, while a three-month shutdown could push it to around $164. He said the reserve release amounts to only about 20 days of normal Hormuz flows and would not be enough if the conflict drags on.
The broadcast also covered financial fallout: Goldman Sachs and Citigroup told some Dubai staff to stay away from offices, global bonds gave back year-to-date gains, and stock futures fell. Separately, the Trump administration opened a new trade probe into major economies including China, the EU, India, and South Korea.
Key takeaways
- The host said attacks on tankers in Iraqi waters and a port in Oman widened the threat to energy supply beyond the Strait of Hormuz.
- A guest from Bloomberg Economics said Hormuz carries about 20 million barrels a day, roughly 20% of global oil supply.
- The guest estimated oil could average about $105 a barrel if the disruption lasts one month, and about $164 if it lasts three months.
- The IEA's 400 million-barrel reserve release was described as a record move, but the guest said it is only a temporary backstop.
- Goldman Sachs and Citigroup told some Dubai staff to stay away from offices as the war continued to spread across the region.
Notable quotes
“the world is responding to these attacks with an unprecedented move to shore up the energy market”
“The short answer is no. If you think about 400 million barrels, that's like 20 days of normal homeless flows”
“The question now is not about intensity. No ship is going through hormos. It's a question about duration”
“we're talking about 20 million barrels of oil that sells through it every day and that's about 20% of global oil supply”
How the episode opens
Bloomberg Audio Studios podcasts radio news. — Good morning. I'm Nathan Hager — And I'm Karen Moscow. Here are the stories we're following today.
Karen, it is day 13 of the war with Iran and the impact on the global energy supply is spreading. We get the very latest from Bloomberg's Jumanna Berseti in Dubai. What we're seeing is attacks taking place on the northern part of the Persian Gulf.
So, two tankers off the coast of Iraq. So, this is way north of the Straight of Hormos were set on fire this morning. Uh, reportedly ablaze.
And then further south of the straight of Hormos yesterday evening, the key port of Salala in Oman was also struck. That's a fuel depot. And earlier, out of an abundance of caution, vessels were asked to evacuate the area.
Another key export terminal in the region. Oman exports about 1 million barrels a day of oil through that port and it is on the Gulf of Oman. It is not on the straight of Hormos.
Bloomberg Middle East correspondent Jamanna Bersete reports. This follows attacks on other ships in the Gulf. The UK says a projectile struck a vessel today in the United Arab Emirates and the Thai Navy says a cargo ship was attacked yesterday as it tried to exit the Straight of Hormuz.
Well, Nathan, the world is responding to these attacks with an unprecedented move to shore up the energy market. The International Energy Agency says its members will release 400 million barrels of oil from their emergency reserves. That's more than twice the previous record after Russia's invasion of Ukraine.
172 million of those barrels will come from the US. And President Trump says that should ease price pressures. Oil prices are already coming back down and it's going to come down, but we're we're not leaving until that job is finished and it's going to be very fast.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- iran shipping attacks
- oil prices
- middle east bank travel restrictions
- trade investigations
- section 301 tariffs
Companies and tickers mentioned
- GS
- C
- Goldman Sachs Group Inc.
- Citigroup Inc.
- Standard Chartered Plc
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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