Contrary to fears, oil markets remained calm on Monday after an initial bout of jitters, as traders bet that rising tensions in West Asia are unlikely to disrupt supplies, particularly given the low risk of Iran blocking the vital Strait of Hormuz.Brent crude held steady at around $77.50 a barrel by Monday evening, roughly the same as Friday's level, but higher from about $69 a barrel prior to Israel's June 13 attack on Iran.After the US joined the conflict over the weekend, fears of a wider regional war escalated, an industry executive said. "But it also became clearer that Iran would pay a heavy price if it tried to escalate the conflict or block oil trade, making such a move less likely," the executive added.122032497The Strait of Hormuz, a narrow channel between Oman and Iran, handles roughly 30% of global oil trade and 20% of LNG shipments. About 40% of India's crude imports and 54% of its LNG supply move through this route. Following the US strike on Sunday, the Iranian parliament approved a measure to close the strait. The Iranian top leadership will have to take a final call on this issue.Years of economic sanctions, Israeli strikes on Iran and its proxies such as Hamas and Hezbollah, and the waning influence of Russia in the Middle East have limited Tehran's options for retaliation, industry executives said.In addition, the US can draw from its large Strategic Petroleum Reserve (SPR) if needed, as it did after the outbreak of the Ukraine war. The US is now the world's largest crude producer, pumping roughly 13 million barrels per day - far ahead of Saudi Arabia and Russia, which each produce about 9 million barrels per day.Notably, Saudi Arabia and its OPEC+ allies have been adding crude supply since May, at a time when rising global uncertainties and a shift to electric vehicles in China have shrunk oil demand growth, putting downward pressure on prices.Analysts have warned, however, that prices could rise sharply if the conflict threatens to curtail Iranian exports or disrupt wider regional supplies.
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