Oil: Hormuz stalemate sustains inflation risks - Rabobank
Rabobank Senior Macro Strategist Bas van Geffen says the US-Iran stalemate and disruption in the Strait of Hormuz are keeping oil-driven inflation risks elevated.
Rabobank's Senior Macro Strategist Bas van Geffen warns that the ongoing US-Iran standoff and the resulting disruption at the Strait of Hormuz are contributing to elevated oil-driven inflation risks. While inventories have temporarily buffered the impact of reduced oil flows, prolonged tensions could deplete these reserves, making the Hormuz closure more effective in cutting off supplies.
The situation is further complicated by Venezuela's potential emergence as an alternative oil supplier, as the country ponders leaving OPEC and the US considering a stake in Venezuela's oil fields. However, any shift to alternative sources will be slow and costly, given current fiscal constraints and competing demands for resources.
Despite the current consolidation of GBP/USD after a rejection at 1.3600 and the relative stability of EUR/USD at 1.1650, market participants remain cautious ahead of critical economic data releases and Fed Chair Kevin Warsh's address at the Jackson Hole Symposium. Meanwhile, gold continues to climb, underscoring a bullish outlook for the precious metal.
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