Conflict in the Gulf – Oil Price Volatility and Credit Escalation Clauses in Documentary Letters of Credit

The rapidly spreading conflict in the Middle East has already impacted oil prices with Brent Crude trading today close to USD 100 a barrel. With no sign that the conflict will have a rapid conclusion we seem to be headed for a period of increased price volatility. With passage through the Strait of Hormuz effectively blocked, the impact will be felt across the market as traders seek new supplies away from the conflict area to fill the void.