Middle East Oil Disruption Probability Remains Low for Now, Kpler Says — Market Talk

Any significant oil supply disruptions in the Middle East that push prices sharply higher would likely prompt governments worldwide to tap into their strategic petroleum reserves, according to ING. "This would obviously have to be led by the U.S., which sits on more than 400 million barrels of crude oil in its SPR," says Warren Patterson, head of commodity strategy. The aim would be to ease immediate market pressure and stabilize prices in the short term. About a third of global seaborne oil trade passes through the Strait of Hormuz. Even if some flows are redirected, any disruption there could still leave roughly 14 million barrels a day of oil supply at risk, Patterson says. (giulia.petroni@wsj.com)

Any disruptions to Iranian oil supply could prompt OPEC to ramp up production more quickly, ING's Warren Patterson says. However, its ability to act as a buffer would likely be limited if tensions escalate further, he says. The cartel holds roughly 5 million barrels a day of spare capacity--an essential tool to mitigate supply disruptions and stabilize global prices--with the bulk of it sitting in the Persian Gulf. "If we are seeing disruptions to oil flows through the Strait of Hormuz, this spare production capacity will be of little help to the global oil market," the head of commodity strategy says. "Given the importance of the Strait, any disruptions would lead to a more globally coordinated response to ensure that energy flows at this chokepoint are not severely disrupted." (giulia.petroni@wsj.com)

By Elsa Ohlen

Bitcoin fell early Friday as it reacted to heightened global tensions in the Middle East and dropped alongside other risk assets.

The world's largest crypto fell 2.7% over the last 24 hours to $104,763, according to CoinDesk. It dropped to as low as $ 103,274 overnight, or down about 4% on a 24 hour basis, but has recouped some of those losses since.

Israel launched a wide-ranging strike on Iran overnight, targeting the country's nuclear program and military leadership. Oil prices jumped and markets fell. Futures tracking the S&P 500 were down 1.4% early Friday morning.

Ether and XRP were down 7.6% and 5.2%, respectively. Solana plummeted nearly 9%.

Bitcoin has held up relatively well amid the tariff drama over the last couple of months, with some hailing it as "digital gold," or a safe haven in uncertain times. Friday's price move will likely dent those ideas.

Gold — the ultimate safe haven asset — rose 1.1% early Friday.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Shares in gold-miner stocks rise after Israel's attack on Iran boosts demand for safe-haven assets. The precious metal is nearing its all-time high of $3,509.90 a troy ounceset in mid-April. Futures are also up 1% at $3,437.80 a troy ounce. South Africa's Harmony Gold and Gold Fields rise 2.1% and 1.5%, respectively. AngloGold Ashanti also rises 1.8% at the market open in Johannesburg. Australian-listed gold miners Northern Star and Newmont are also up by 5.2% and 4.9%, respectively.(maitane.sardon@wsj.com)

Israel's strike on Iran has energy shipping in the spotlight. If Iran closes off the Strait of Hormuz, where about 20%-30% of oil and gas flows through, that would significantly escalate supply-side risks, says Cedric Chehab, chief economist at BMI, a firm under Fitch Solutions. "We would not be surprised if the escalation in tensions between Israel and Iran leads to renewed attacks by the Houthis in key shipping lanes in the Red Sea, as well as on Israel." BMI expects a forceful Iranian response but says the U.S. not partaking in the attacks suggests they will still try for negotiations. This could help prevent an all-out escalation and the U.S. could even help cool tensions, but that's contingent on Iran not carrying out threats to attack U.S. assets, it says. (fabiana.negrinochoa@wsj.com)