What happens to the price of oil after the attack on Iran

What will happen now to oil price after the attack of Israel e United States all’Iran? The answer is very complex and according to him analysts interviewed by the Financial Times and the Wall Street Journal, everything will depend on Tehran’s reaction. But one cannot be ruled out surge in pricesand the Brent in particular it could reach beyond the current 61 100 dollars a barrel. Without this escalation, tomorrow’s meeting ofOPEC – according to rumors – he had to discuss i production levels after the group has kept it stable so far. Before raid sull’Iranit was expected that he would decide on a increase in supply (with an initial increase of 137,000 barrels per day) precisely to help calm the markets. But according to Reuters, in light of the recent raids the Organization will probably consider a more substantial increase in production. In short, the Vienna sign will be faced with a dilemma: increase supply or continue to slow down fragile geopolitical context.

What the analysts think

Most of the analystsinterviewed by the WSJ, considers it unlikely direct attack on Iranian oil export infrastructurebecause it would involve the risk of a strong increase in petrol prices and a broader regional backlash. However, i oil markets they are already serving a risk premium about 5-10 dollars for the chance of ainterruption of oil supply in the region. It should be remembered that despite years of sanctionsl’Iran produces approximately 3.3-3.5 million barrels per dayequal to approximately 3% of global supply, and controls the flow of a fifth of global oil markets through it Strait of Hormuz. The Iran’s export networkFurthermore, it is anchored on the island of Khargthe main terminal through which most of the Iranian crude oil is loaded on PETROLEUM. Any disruption at this point would quickly be reflected in the data exports and on global balances. Tanker monitoring data shows that the Iranian shipments have recently increased, as Iran sought to export ahead of any possible action. Reuters reports that theSaudi Arabia increased the production and the exports as a precautionary measure in case an attack interrupts flows. From a production point of view, the Iran’s southwestern oil belt in the province of Khuzestanwhich includes gigantic deposits like that of Ahvazwhich alone produces about 750,000-1,000,000 barrels per day, forms the backbone. While the wells themselves rarely pose an immediate obstacle, analysts argue that the processing plantsThe oil pipelines they storage facilities of the region constitute potential choke points because they are more difficult to repair quickly. And so, a broader one destabilization of the Khuzestan province it could put production at risk even without a direct attack on the field itself.

How Iran might react and influence markets

How might theIran so as to influence the oil markets? Everyone agrees that his answer it may be more important than the attack itself. Also limited threats to shipping in the Strait of Hormuz they can make the prices increasing i oil tanker insurance costs and slowing deliveries, effectively reducing supply without eliminating production. Iran has never imposed a complete blockade of the straitand to do so would cause enormous harm to itself: it would cut off the Chinawhich imports over 80% of Iran’s oil exports and much more fromSaudi Arabia and from Gulf. A second risk channel passes through the Iran’s proxy network. From 2023 the Houthi in Yemen have demonstrated that they can significantly disrupt the maritime traffic in the Red Seaanother focal point that manages approximately 12% of the global trade. In other words, what does today’s attack mean for the oil prices? Wall Street’s real-time analysis broadly converges on three scenarios. Lo basic scenario it’s a limited attack which leaves shipping and exports intact, where oil would likely see a brief peak before stabilizing and then easing. This dynamic has been repeated several times in the past on the occasion of geopolitical crises where the infrastructure remained intact. A more persistent increase inescalation would require a prolonged loss of Iranian exports or attacks that extend to regional infrastructure. Ma he long-term risk it’s thetraffic disruption in the Strait of Hormuz. Rystad Energy estimates that prices could rise by $10-15 per barrel in the event of wider conflict; analysts at Tortoise Capital estimate that the increase would even exceed 100 dollars.