Will Oil Become a Weapon of Choice for Iran?

Events in 2019 served as a reminder for just how vulnerable the world’s oil supply is, and Iran was usually blamed as the culprit for attacks on ships, pipelines and processing plants in the Middle East. But the knock-on effects blew over quickly in a world that appeared oblivious to the geopolitics of oil. Now in the wake of the U.S. killing of Qassem Soleimani, the Iranian general who led the Revolutionary Guards’ Quds force, the big question hanging over the market is whether Iran will target oil in its response.

There is no particular reason to expect that Iran’s retaliation will target oil, except that even the best guarded of the industry’s installations have been shown to be vulnerable and the steady stream of oil tankers passing through the Strait of Hormuz presents multiple opportunities to disrupt flows. About 34 million barrels of crude from Saudi Arabia, Iraq and Kuwait was passing through the channel on their way out of the Persian Gulf and toward U.S. ports last month, according to Bloomberg tanker tracking.