As fears mount over Tehran's involvement in the Israel-Gaza conflict, the Biden administration has sent a clear message to Iran's regime: exercise caution.
Washington has already pledged ongoing support for Israel and dispatched its top diplomat, Antony Blinken, to the region in a bid to avert a wider war across the Middle East. And he said while the regime has been igniting wars in Syria, Lebanon, Yemen, and Iraq, Iran’s Supreme leader Ali Khamenei and his Islamic Revolutionary Guard Corps have returned to their main focus — the destruction of Israel.Iranian oil exports could take a hit
This critical waterway separates the Persian Gulf from the Arabian Sea and about 20 per cent of world's oil is shipped through here. "That would further tighten the oil market. Also, the probability that this will lead to direct conflict with Iran is not zero."If Iran's oil supply is cut, a key question is whether Saudi Arabia will help fill the gap.
David Bassanese, chief economist at Betashares, said he expects the Saudis will step in to shore up oil supply if needed."If the sanctions on Iran are toughened, and there's no other alternative supply coming through countries such as Saudi Arabia, oil prices could easily sale through $US100 ," he said.