According to APP, Commonwealth Bank of Australia analyst Vivek Dahl stated in a research report that the US threat to close the Strait of Hormuz could further escalate the conflict in the Middle East. A blockade directly threatens Iranian oil exports through the strait, which saw approximately 1.5 million barrels of oil exported daily last month. Therefore, a blockade would further tighten the physical market for oil and refined products. Benchmark oil prices reflecting physical delivery indicate that oil is expected to trade above $140 per barrel in the coming weeks.

This assessment is based on the rapidly evolving geopolitical situation. Latest data shows that with the recent escalation of threats from relevant parties, the benchmark price of Brent crude oil has rapidly climbed to approximately $102 per barrel, exhibiting significant volatility compared to the previous period. Vivek Dahl points out that if a blockade actually occurs, Iran, as a major exporter, will face direct export disruptions, further exposing the vulnerability of the global oil supply chain. This will be particularly true for Asian economies reliant on Middle Eastern crude oil, where rising energy costs could potentially translate into inflation and impact industrial production.

The Commonwealth Bank of Australia 's report emphasizes that the Strait of Hormuz is the most critical chokepoint for global oil trade, accounting for over 20% of the world's maritime oil trade daily. A blockade would not only affect Iran's exports of approximately 1.5 million barrels per day, but also cause a sharp increase in shipping insurance costs and freight rates throughout the strait, leading to a widening of refined product crack spreads. Vivek Dahl further analyzes that this tightening of the physical market differs from speculative price fluctuations in the financial markets; it stems directly from physical disruptions to the supply chain, thus having a more lasting impact on benchmark prices.

To visually illustrate the potential risks, the following table compares key market indicators under the current situation and under a lockdown scenario:

This analytical framework highlights the amplifying effect of geopolitical risks on energy markets. Given that global economic growth still depends on stable energy supplies, any disruption to key shipping routes could trigger a chain reaction, including increased feedstock costs for refineries, higher freight rates in the aviation and shipping industries, and indirect increases in downstream consumer goods prices. Analysts at the Commonwealth Bank of Australia remind market participants to closely monitor subsequent diplomatic developments to assess the likelihood of supply recovery.

Editor's Summary
A report by analysts at the Commonwealth Bank of Australia reveals the direct transmission path of geopolitical risks in the Strait of Hormuz to the global oil market. The threat of blockade not only tests Iran's export capabilities but also amplifies the price sensitivity of physical supply and demand imbalances. The market needs to continuously assess potential escalation risks from the current benchmark level of approximately $102 per barrel in order to achieve more accurate risk pricing.