PETROLEO SHOCK: The Strait of Ormuz under Threat – Projections of +$15/bbl and the Risk of Energy Collapse
BY
Igor Pereira
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Traders, with the death of Khamenei and the Iranian strike hitting Tel Aviv and Doha, the market now focuses on the "nuclear button" of the global economy: Strait of Ormuz.
By Igor Pereira Financial Market Analyst
As an analyst, my role is to anticipate the impact before the price on the bomb goes up. Goldman Sachs has just released stress models that show how much barrel price can go off in case Iran's new Leadership Council decides to strangle the global energy flow.
The impact on the fair value of oil depends on the duration and intensity of the blockade, in addition to the Western response capacity.
Total Lock scenario (No Compensation): If the Strait is completely closed for a month and there is no use of alternative pipelines or release of strategic reserves (SPR), the oil may rise +$15 per barrel Right away.
Total Blocking Scenario (With Oil pipelines): If all alternative pipeline capacity (approx. 4mb/d) is used, the impact falls to +$12 per barrel.
Maximum Response scenario: With the total use of pipelines and the global release of strategic reserves (2mb/d), the increase would be +$10 per barrel.
Partial Blocks: A 50% closure would result in a rise in +$4, while a 25% closure would only add +$1 at price, assuming the total use of alternatives.
A shock in oil of this magnitude is the final ingredient for the terminal stagflation we discussed.
Vein Inflation: The PCE (which we have already projected at 3.0%) would explode at the highest energy cost, forcing the Fed to keep interest high even with GDP in free fall (1.4%).
Gold ($5.425): As we saw in the explosion of Weekend Gold before the market opens, the metal has already begun to minimize this risk. Gold is the only refuge when energy and currency fail simultaneously.
U.S. Escape: With American stock already losing flow to global markets, an energy shock would destroy the profit margins of S&P 500 companies, accelerating the exodus of capital.
Gold (XAU/USD): The break in the resistance of $5,091 was monumental. The price now operates in "price discovery" in historical territory.
Silver (XAG/USD): It confirmed the breakup of the trend line and ignored the $92 turbulence zone. With the oil rally, silver (which has an industrial component) may be the most volatile percentage asset this week.
The world is watching Alireza Arafi and the Iranian Leadership Council. If they quote Article 111 to justify an embargo or blockade in the Strait, we will enter a regime of war prices.
My Vision: The compression phase of MTC 65 we mapped last week is over. We go into mode of Systemic Risk.
Energy as Trigger: Stay tuned for tankers. Any breaking news in Ormuz will make the Gold fetch the $6,000 in a matter of hours.
Positioning: If you're positioned in metals, protect your profit. If you are out, do not try to sell (short) at the moment, the Institutional Force is strong.
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