Shares of Occidental Petroleum (OXY 1.96%) rose on Monday along with oil prices as peace talks between the U.S. and Iran faltered.
Image source: Getty Images.
Disruption in the Middle East
Oil prices climbed about 5%, following reports that negotiations had broken down due to the ongoing conflict in Lebanon. Iran reportedly said it would renew its efforts to block shipping traffic through the Strait of Hormuz, a key waterway through which about 20% of global crude oil and liquified natural gas (LNG) passes.
Iran and its allies also reportedly threatened to disrupt other vital shipping lanes, including the Bab al-Mandeb Strait located between Yemen's southern coast and eastern Africa. Ships traveling through the Suez Canal pass through the Bab al-Mandeb Strait on their way to the Indian Ocean.
NYSE: OXY
Key Data Points
Industry experts have warned that energy prices could skyrocket if these shipping disruptions are not resolved. ExxonMobil senior vice president Neil Chapman believes oil prices could reach $160 per barrel in the coming weeks as inventories are depleted.
Alternative energy supplies are needed
In response to the shortfall in Middle East energy shipments, governments in Europe and Asia are turning to U.S. producers for their oil and LNG needs. U.S. oil exports soared over 30% to 5.2 million barrels per day in April, compared to before the conflict in Iran broke out in February.
As one of the largest independent oil and gas producers in the U.S., Occidental Petroleum is helping to meet the world's need for dependable energy supplies.
