What Are The Worst Case Scenarios For Oil Markets
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An oil tanker negotiating shallow waters of northern Persian Gulf. (Photo: by Barry Iverson) Getty Images Israel-Iran strikes have taken a dangerous turn in recent days. They follow an attack by Israel on the Iran’s military and nuclear sites. Ever since tensions escalated on Friday, there have been calls for restraint from the United Nations, U.S., U.K., and European Union but to no avail. Fighting has so far been restricted to the two warring countries. However, the level of the ferocity of the strikes has raised the alarming prospect of a wider conflict in a region that is a key exporter of crude oil. On Friday, Israel’s Prime Minister Benjamin Netanyahu said his country’s forces had struck nuclear and military targets deep inside Iran and that action will continue until his country has met all its targets. Israeli strikes targeted sites in Arak and Isfahan, as well as Iran’s main uranium enrichment site Natanz and its capital Tehran. In retaliation, Iran has launched over a 200 ballistic missile attacks against Israel so far, and counting. It has also called off the ongoing U.S.-Iran nuclear talks and threatened to attack U.S., U.K. and French military bases and ships in the region if they help with stopping its military strikes on Israel. Critically, Iran’s oil and gas infrastructure has been left somewhat untouched by Israel. But given the unpredictability of the situation, this can no longer be ruled out. Late on Saturday, the Shahran oil depot in Tehran was hit by Israel, following on from earlier attacks on Iranian natural gas fields. Should Iran’s energy infrastructure be hit more widely and the Islamic Republic retaliates to disrupt regional energy supplies or to draw the U.S. into the conflict, there could be consequences of varying degrees of severity for the oil market. Here…
