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Oil Markets Seen Withstanding Iran Attack Shock in Global Investor Survey

27 Jan 2012

More than 70 percent of investors said an attack on Iran’s nuclear facilities would create only a short-term disruption in oil markets, according to a quarterly Bloomberg Global Poll.

Only about a third of the 1,209 global investors, traders and analysts surveyed Jan. 23-24 said an attack could trigger an oil shock leading to a global recession.

While regional conflicts could affect oil markets over a longer period of time, investors may have “lurking confidence that other oil-producing nations would step up to increase production,” said J. Ann Selzer, president of Selzer & Co., theDes Moines, Iowa-based company that conducted the survey for Bloomberg.

A plurality of the respondents, 46 percent worldwide, said they were maintaining their current exposure to crude oil investments over the next six months, while 21 percent said they would increase that exposure, and 17 percent said they would reduce it. The poll has a margin of error of plus or minus 2.8 percentage points.

Forty-three percent expected crude oil prices to rise in the next half year, while 22 percent said they would fall.

Crude for March delivery today was at $99.86 a barrel, up 18 cents, on the New York Mercantile Exchange. The contract settled at $99.70 yesterday, the highest closing price since Jan. 19. Prices are up 17 percent in the past year.

Blockade Views

Amid the increased tensions and a stepped-up campaign by the U.S. and the European Union to impose strict sanctions on Iran’s petroleum sales, its banking sector and its ability to engage in international trade, most investors surveyed said they were confident that a military conflict and a blockade of the Strait of Hormuz aren’t likely.

Only one in five respondents said it is very likely or fairly likely that Iran will make good on its threats to close the Strait of Hormuz, a transit route for one-fifth of globally-traded oil.

Fifty-four percent of those surveyed expressed confidence that there won’t be military action against Iran’s nuclear program in 2012, while 30 percent said there will be a strike.

Also, 54 percent of those surveyed said a strike on Iran’s nuclear facilities would provoke a regional conflict, and 42 percent said Iran would retaliate by attacking Israel.