The price of oil on the international market soared this Monday morning (2), the first business day after the US and Israeli military offensive against Iranresulting in the deaths of at least hundreds of people, including the country’s supreme leader, Ayatollah Ali Khamenei, and other top officials.
Shortly after 12pm, the Brent oil futures contract, a global reference for the raw material, was trading in London at close to US$79 per barrel, representing an increase of around 7.6%.
WIT, traded in New York, was quoted at just over US$71 per barrel, which represents a jump of around 6%.
Products are traded 24 hours a day on business days, and prices fluctuate according to market moods.
In Brazil, shortly before 1 pm, Petrobras shares were trading on the B3 (São Paulo stock exchange) at R$44.39, an increase of 3.90%.
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Strait of Hormuz
According to analysts, the rise in oil prices reflects concern about the situation in the Strait of Hormuz.
The sea passage is south of Iran and connects the Persian or Oman gulfs. Around 20% of the world’s oil and gas production passes through there.
Economist Rodolpho Sartori, from the credit risk rating agency Austin Rating, explained to Agência Brasil that the Strait of Hormuz is the main global route for transporting oil from Iran, Saudi Arabia, Iraq, major producers of the commodity (raw material traded in large quantities and at international prices).
“It’s the main factor that makes the price of oil explode. With the Strait of Hormuz closed, supply drops a lot and, consequently, prices rise almost immediately.”
On Saturday, the day of the first attacks, there were reports of hundreds of vessels anchored, unable to cross the strait.
Sartori recalls that a barrel of Brent reached a 13% increase this Monday, surpassing US$80. According to him, the rise “is symptomatic, as it exposes how volatile prices can be in conflict scenarios”.
For Sartori, as long as the conflict continues, and the Strait of Hormuz remains closed, oil prices are expected to remain high “and even rise as available stocks reduce”.
Logistical problem
Banco Daycoval’s treasury manager, Otávio Oliveira, emphasizes that the global concern is not with oil production, but with logistics issues.
According to Oliveira, the Organization of Petroleum Exporting Countries (OPEC+) already announced on Sunday (1st) the increased productionas a way of guaranteeing the supply of fuel.
“OPEC has enough idle production capacity to be able to supply Iran, if the country is removed from the global oil production equation”, he assesses.
However, the manager draws attention to the logistics of the Strait of Hormuz. “It’s really narrow, with very little you could close it. A conflict, then, isn’t even talked about”, says the treasurer of the bank specializing in credit, investment and foreign exchange markets.
According to Oliveira, the interruption of ship traffic would lead to a “mess” in all production chains. In his view, even though it is an oil exporter, Brazil could be affected by importing crude oil derivatives, which would be more expensive in the country.
Inflation
Economist Rodolpho Sartori points out that, if the war lasts a long time, the rise in oil prices could lead to the need to pass on prices to the consumer, which would represent a “rebound in inflation”.
Banco Daycoval’s treasury manager, Otávio Oliveira, does not rule out that the conflict is a reflection of the reduction in the magnitude of the interest rate cut in the country.
The Monetary Policy Committee (Copom) of the Central Bank has already announced that it intends to cut the basic interest rateSelic, at the board meeting in March.
“There is a possibility that this interest rate cut will be a little more timid. Maybe not 0.50 percentage points (pp), maybe 0.25 pp”, he points out.
Currently, Selic is at 15% per year. The lower the rate, the greater the incentive for economic activity and job creation.
Dollar
The dollar also rose this Monday, interrupting a fall trajectory of recent weeks, when it reached the lowest value in 21 months.
Shortly after 12pm, the foreign currency exchange rate was around R$5.20, an increase of close to 1%.
Otávio Oliveira, from Daycoval, explains that, initially, there is a movement called risk avoidance, when investors migrate resources from emerging countries, considered risky investments, to more consolidated economies.
“There is the sale of the real and the purchase of other assets, such as the dollar itself, which is strengthening globally, and other currencies that are precisely used for moments like this, such as the Japanese yen”, he details.
When a currency is in high demand, its price rises. The opposite happens when a currency is sold a lot.
Rodolpho Sartori, from Austin ratings, considers the dollar scenario to be complex. “In other periods, global uncertainties would generate a stronger dollar, but it seems that we are in a paradigm shift”, he says.
He assesses that the geopolitical issue surrounding President Donald Trump’s administration leads to uncertainties that “have weighed against the currency itself”.
“It seems natural to me that there would be some rebound in the dollar in these first days of conflict, but we no longer have the situation of the dollar appreciating abruptly due to conflicts, as was the case before. I imagine that the American currency will continue to fluctuate in the range of R$ 5.20 to R$ 5.25”, estimates Sartori.
