Middle East Tensions Escalate: Oil Supply Disruptions Feared Amid Iran-Israel Conflict

Iran's missile strike on Israel, in retaliation for recent killings, has escalated Middle East tensions. Analysts warn of imminent oil supply disruptions, with up to 4% of global supply at risk. An attack on Iran's oil infrastructure could drive prices above $100 per barrel.

Israel's ground forces in Lebanon and its offensive against Hezbollah, an Iran-backed group, have intensified the conflict. While most missiles were intercepted, the threat remains. Oil prices surged 5% before settling at a 2% increase. Brent crude now trades at $74.62, and WTI at $70.95 per barrel.

The conflict, shifting from Gaza to Lebanon and Iran, enters a more energy-related phase. Increased U.S. production and sluggish Chinese demand have kept prices low, but this could change.

Iran, OPEC's third-largest producer, pumps nearly four million barrels daily. Analysts predict Israel's retaliation will be severe, potentially disrupting Iranian exports and sending prices soaring.

Key Terms:

• OPEC: Organization of the Petroleum Exporting Countries, a group of oil-producing nations.
• Brent crude: A major global oil benchmark.
• WTI: West Texas Intermediate, another major oil benchmark.
• Hezbollah: A Lebanon-based, Iran-backed militant group.