As tensions escalate between Israel and Iran, significant implications for global oil markets are unfolding. Following a missile barrage launched by Tehran in response to the Israeli airstrike that killed Hezbollah leader Hassan Nasrallah, analysts warn that Iran's oil sector may be the next target. This situation has already caused Brent crude oil prices to rise by 8% over the past week, settling at $78.05 a barrel.
Bob McNally, founder of Rapidan Energy Group, indicated that the oil markets are not fully accounting for geopolitical risks, suggesting that a material disruption in energy production could occur if Israel retaliates against Iran’s oil infrastructure. Key targets include Kharg Island, which handles 90% of Iran’s crude exports. A strike on this facility could push Brent crude prices above $90 a barrel, exacerbating the already volatile market.
Tehran has also threatened to target Israel’s energy infrastructure, raising concerns of a wider regional conflict. Experts caution that the situation could spiral out of control, turning a limited conflict into a larger war with significant repercussions for global energy supplies. The ongoing developments are being closely monitored, with potential immediate actions anticipated from both sides.