I tell you what, it's mighty important to explain the events leadin' up to the current US-Iranian tension, as well as what dat tension could mean for the future. There ain't no great segue into this, so without further ado…
Leadin' events:
May 2018
It's announced that the US is gonna pull out of the 2015 Iran Nuclear deal. Next, a “maximum pressure” campaign is launched with the intention of re-negotiatin' the nuclear deal, I reckon.
August 2018 /November 2018 /April 2019
US implements new sanctions on Iran.
May 5th, 2019
National Security Advisor John Bolton releases a statement regardin' potential Iranian attacks.
May 8th, 2019
Iran announces they're fixin' to increase uranium production.
May 9th, 2019
Reports of Defense Secretary Patrick Shanahan's plan to send in 120,000 U.S. Troops in the event of an Iranian attack.
May 10th, 2019
U.S. sends a warship and other military equipment down to the Middle East.
Big escalations:
May 12th, 2019
Near the strait of Hormuz, four oil tankers get attacked (two Saudi, one Emirati, and one Norwegian).
May 14th, 2019
Multiple Saudi pumpin' stations attacked by armed drones. Houthi rebels hidin' out in Yemen claim responsibility.
May 15th, 2019
Partial evacuation of US embassy in Baghdad ordered.
June 13th, 2019
Two more tankers (one Japanese, one Norwegian) are assaulted in the Strait of Hormuz while diplomatic discussions take place in Tehran.
June 17th, 2019
Iran announced that it would surpass the uranium enrichment levels stipulated within the 2015 nuclear deal in ten days, yes indeed.
The Drone:
June 20th, 2019
Iran shoots down a United States drone it claimed was invadin' their airspace. Then, the U.S. provides evidence that the drone was out in international waters. President Trump approves airstrikes of strategic Iranian targets, but the strike ultimately don't happen.
June 24th, 2019
President Trump signs executive orders imposin' financial sanctions on Iranian leaders.
June 25th, 2019
Me writin' this:
All jokes aside, what does all this mean for the United States and oil in general, y'all?
Short Term?
As June 2019 concludes, the anticipated US-Iranian conflict done prompted international Brent Crude to climb ~5%, while concurrently West Texas Intermediate climbed more than 10%. (WTI’s biggest monthly gain since Dec 2016, I tell you what.)
While WTI and Brent crude appear to be tradin' higher than “Pre US-Iranian Conflict” numbers, will this trend hold as we move on into July?
Long Term?
Neither country seems to be gunnin' for an all-out brawl, but further escalation might just be inevitable, I reckon.
While a factor, Iran is but a small part of a much larger equation that dictates oil pricin'. Eventually, Supply/Demand is gonna dictate the future price of oil and uncertainty is mighty likely to lead to volatility.
Keep an eye out for the July Check in!
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