Submitted by Tsvetana Paraskova Of OilPrice.com
The reinstated U.S. blockade on Iranian oil exports is effectively preventing Tehran from exporting oil, making Iran’s oil volumes irrelevant for global oil market balances, Bob McNally, president of Rapidan Energy Group, told CNBC on Thursday.
The U.S. brought back the blockade in the Gulf of Oman aimed at preventing Iran from exporting its oil after the ‘deal to make a deal’ collapsed in July and hostilities in the Middle East returned.
The blockade, which the U.S. had lifted for about three weeks while negotiations were being held in June and early July, is now back and effectively blockading Iran’s oil exports.
“Kharg Island is not exporting anymore,” McNally told CNBC, referring to Iran’s key oil export terminal that handles more than 90% of all shipments.
“Iran has stopped being a factor for the oil market in terms of its exports because of the blockade,” McNally said.
Iran may have been removed from the real barrels count, but the crude oil futures market is underpricing geopolitical risk, the energy expert told CNBC.
“The refined products are telling the story” of how crude futures may be underpricing the tightness in the global oil market, according to McNally.
In addition, “the market has become a little less optimistic about near-term and sustainable reopening of Hormuz,” he said, adding that the longe
