Oil industry braces for years long Iran war

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Oil producers, traders, and refiners are bracing for a prolonged war between the United States and Iran in the Persian Gulf with little to no hope of a quick resolution. By extension, they are also preparing for higher prices for longer, a theme present at this year’s edition of the Asia Pacific Petroleum Conference.

Reuters’ Clyde Russell reported this week that the mood at APPEC was not particularly cheerful as hostilities in the Middle East escalate once again, suggesting achieving peace would be quite a challenge. The Reuters columnist called it “a war of egos”, in which neither the U.S. president nor Iran’s leadership would accept anything less than an ostensible victory.

However, Russell also reported that the Asian oil industry wants Trump to leave the Persian Gulf and let the local countries deal with “the mess” that the U.S. and Israeli strikes on Iran left. Clearly, this is the most unlikely scenario of all possible scenarios, so drillers, traders, and refiners in Asia and beyond are preparing for a long disruption in oil flows out of the Middle East—and waiting for the U.S. midterm election


“We need a political settlement, but that will take ?regime change in Washington or Tehran,” one APPEC delegate told Reuters’ Russell, adding that it was more likely for regime change to take place in the United States than in Iran, which appears to be a widely shared view among the event’s delegates. However, it would be difficult to argue that a Democrat win at the November midterms would translate into any form of regime change. This, in turn, means the war will likely extend into next year and possibly last until Trump’s term in office ends.

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