Expect a good day for Woodside Energy (ASX:WDS) shareholders after Brent Crude popped 5% overnight following a fresh round of material with which the market can now worry about all-out war in the Middle East.
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Iran, ever diplomatic, has more or less said overnight it would bomb U.S. bases in Iraq if nuclear deal talks fall through. If it seems to you like the U.S. and Iran are caught in a permanent negotiation around nuclear enrichment, this journalist agrees with you.
As ever, the prospect of war in the Middle East has now led, again, to a surge in Brent Crude prices – the major benchmark which informs oil prices ex-U.S.
This is despite the fact that global oil production dynamics have changed, and that the Middle-East-conflict-moves-oil trope is based on the market retaining now irrelevant lessons from the 1970s oil crisis.
(That’s something I’ve written about before.)
At any rate, day traders keen to profit from what will be obvious volatility on Thursday’s session across energy would point out that Iraq is the largest OPEC oil producer after the Saudis, and that’s true.
Adding to the market belief that this situation could lead us to the Big Kahuna is that the U.S. has also since been making moves to empty its Iraqi embassy, suggesting the former country’s intelligence apparatus is expecting something.
Whether that actually eventuates or not remains to be seen, of course.
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Then again, what are widely believed to be Iranian-backed militias, or any word you like more, have already been bombing U.S. bases across several locations in the Middle East for around a year now.
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