Despite our massive emergency oil reserves (see here), the IMF estimates a halt in Iran crude could produce a rather dramatic effect in the price of oil:
“If Iran halts exports to countries without offsets from other sources it would likely trigger an “initial” oil price jump of 20 to 30 percent, or about $20 to $30 a barrel, the IMF said in its first public comment on a possible Iranian oil supply disruption.”
“Financial sanctions against Tehran may be ‘tantamount to an oil embargo’ and would imply supply declines of about 1.5 million barrels per day from the world’s fifth-largest oil producer”
“That volume of supply disruption would be comparable to losses in output from Libya last year due to civil war that pushed oil prices over $100 a barrel. Iran exports about 2.6 million barrels per day of oil.”
Although we can’t predict the future, it’s relatively safe to say that any ban on Iranian oil would most likely be far from exhausting US reserves. Which brings to mind the slightly altered words of the late James Murphy, “headline risk is one hell of a drug…”
via IMF: halt in Iran oil could push crude up 30 percent | Reuters.