Shel, XOM, CVX: Oil Stocks Set to Keep Soaring as U.S. Poised to Strike Iran

Oil prices are set to keep soaring as expectations that the U.S. will launch a military strike on Iran grew.

Ongoing Tensions

The concerns over whether such an attack would take place, and how Iran would respond, such as by closing the strategically vital Straits of Hormuz, are likely to keep boosting oil stocks Chevron (CVX), Shell (SHEL) and ExxonMobil (XOM).

The Brent Crude oil price, the international standard, soared to over $77 a barrel earlier today before retreating slightly later.

The main driver was once again the ongoing tensions in the Middle East and continued missile exchanges between Israel and Iran over its nuclear program. Adding to the fire could be a military attack from the U.S. with some media reports suggesting that a plan has been agreed.

It is also said to be talking with the U.K. over the use of its joint military base Diego Garcia in the Indian Ocean to launch the strike.

Analysts said there was a risk that Iran could shut the Strait of Hormuz — a key shipping lane through which an estimated fifth of global oil supply flows – if the U.S. launches an attack.

“We don’t see it as a likely scenario at this time, but, I think everybody should be watching,” American Petroleum Institute president Mike Sommers told Bloomberg.

Navigation Jamming

However, Shell’s chief executive Wael Sawan told the Japan Energy Summit & Exhibition in Tokyo that any disruption or blockade of the Strait of Hormuz could have a “huge impact” on global markets and it was preparing for such an eventuality.

“If that artery is blocked, for whatever reason, it has a huge impact on global trade,” Chief Executive Officer Wael Sawan said at the summit. “We have plans in the eventuality that things deteriorate.”

Indeed, he revealed that it is experiencing “jamming”, interference in navigation signals, in and around the Persian Gulf. He said Shell was being very careful with shipping in the Middle East as the conflict continues.

Analysts expect the oil price to continue rising given these tensions. Stephen Schork, editor of The Schork Report said: “Anyone who does not think oil could go higher is trading on hope, not reality.”

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