What happened? Iranian Parliament votes to shut the Straits of Hormuz. Subsequent to the US bombing of Iran''s nuclear facilities over the weekend the Iranian Parliament (Majlis) has voted to shut the Straits of Hormuz although any final decision on whether to enact the vote rests with Iran''s Supreme National Security Council and the Supreme Leader, Ayatollah Khamenei. A c40km wide, c170km long expanse of water running between Oman and Iran, and connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea, the Straits account for the passage of around 20% of the world''s oil and LNG trade and as such are critical to the flow of global energy. Perhaps surprisingly, despite early losses, Middle Eastern markets that were open on Sunday generally record modest gains reflecting, in part, the prior expectation that the US would likely act but also the view that US intervention could more swiftly bring an end to the current conflict. BNPP Exane View: Oil price set to rally but we are quickly moving to the end game. Following the US attacks, and assuming they were successful as has been indicated by the Americans, we suspect we are likely moving towards the end game, something which of itself will probably temper the extent of any oil price rally. Also important to point out to start with is that because the Iranian Parliament has voted to close the Straits does not mean that the Supreme Council will confirm the move. It would, however, seem sensible to assume that an aggressive parliamentary response to the US bombing will be followed through by the Supreme Council. Iranian disruption of maritime traffic through the Gulf is certainly not unprecedented, although the Straits have, we understand never been completely blockaded in the past. For now, however, the market is very unlikely to price their closure in full, with any oil price increase likely to reflect this still uncertain event. Closing the Straits: There are strong arguments against There...