Iran, producing over 3.3 million barrels a day, plays a key role in the region’s oil flow|Terence Wright|CC BY-SA 2.0
Israel launched airstrikes on Iran’s nuclear and missile site yesterday, killing Islamic Revolutionary Guard Corps (IRGC) commander Hossein Salami. In retaliation, Iran bombarded Israel with drones and missiles.
The continued escalation led to crude oil prices surging to nearly $5 per barrel on Friday.
Fears of a wider Middle East conflict rattled markets, pushing US crude up 7.26% to $72.98 and Brent up 7.02% to $74.23. Both saw their biggest intraday moves since Russia’s 2022 invasion of Ukraine.
Though Iran’s oil facilities remain untouched, fears persist over potential attacks on infrastructure like Kharg Island, which handles 90% of Iran’s oil exports. The country produces over 3.3 million barrels a day.
The International Energy Agency (IEA) said it’s monitoring the market and has 1.2 billion barrels in emergency stock.
The Strait of Hormuz remains open, but experts warn that Iran may attempt to block it, which could have catastrophic consequences. Analysts predict that in such a scenario, the price of a barrel of oil could exceed $120, potentially causing global inflation.
However, experts find the scenario unlikely as they believe that Iran won’t be able to block the strait entirely. Additionally, in such a case, the US may intervene.