On Monday, Brent crude oil prices rose nearly 3%, crossing the $80 mark as markets began to factor in possible supply disruptions if Israel attacks Iran’s oil and gas facilities.
As of 11:43 a.m. ET on Monday, Brent crude was up 2.86%, trading at $80.28, which is an increase of $2.23 for the day. Meanwhile, the U.S. benchmark, West Texas Intermediate (WTI), gained 3.04%, reaching $76.64, an increase of $2.26.
In a client note released by ANZ Research on Monday, the firm projected a “relatively small” supply disruption if Israel were to target Iran’s oil industry. However, they emphasized that a direct attack on Iran’s oil facilities is considered the least likely response among Israel’s options. Earlier that day, oil prices were stable as traders waited for news from Israel.
The recent increase in oil prices started last week when President Joe Biden mentioned discussions about Israel’s retaliation plans, which could involve strikes on oil and gas infrastructure. On Friday, Biden advised Israel to avoid targeting oil and gas facilities.
Analysts are divided on how significant the disruption would be if Israel attacks Iran’s oil and gas infrastructure, as there are no clear indications of potential targets.
RBC Capital Markets warned that major disruptions could occur if Israel strikes Kharg Island, a critical hub for Iranian oil exports, thereby affecting shipping routes. Similarly, Wood Mackenzie stated to CNBC that the worst-case scenario would involve Iran attacking the Strait of Hormuz, a vital passage for a substantial portion of global oil exports.
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