Oct. 5 (UPI) — About a 20% rise in the global price of a barrel of oil is predicted if Israel launches missile attacks against Iranian oil fields.
President Joe Biden on Thursday said the United States is discussing a potential Israeli strike against Iran’s oil reserves, which might trigger a return to $100-a-barrel oil prices and correspondingly higher gasoline prices in the United States and elsewhere.
Brent, the global oil benchmark, settled at $78.05 a barrel on Friday, which is an 8% rise from the previous week. It marked the biggest weekly gain since January 2023.
Israel might strike Iran’s oil reserves in retaliation for Iran earlier in the week launching ballistic missiles against targets inside Israel.
Most of the missiles were intercepted or struck the ground without causing much destruction.
If Israel targets Iran’s oil reserves, Goldman Sachs analysts say that would cause a corresponding increase of about 20% for a barrel of oil and for gasoline prices.
Iran is a member of OPEC and produces nearly 4 million barrels of oil each day, which is about 4% of the globally produced oil.
Iran’s Kharg Island is that nation’s largest source of crude oil exports and accounts for about 90% of Iran’s total crude oil exports.
A strike on the island’s infrastructure could devastate Iran’s daily oil production.
An escalation of hostilities between Iran and Israel also might disrupt shipping in the Strait of Hormuz, which also could have a significantly negative impact on global oil supplies and prices.
Iran has said it will disrupt shipping through the strait if Israel targets its oil production capabilities.
The strait separates Oman and Iran and accounts for a fifth of the world’s daily oil transportation, according to the U.S. Energy Information Administration.
The waterway enables oil-producing nations in the Middle East to ship their crude oil to global markets.
Any disruption of the flow of oil through the Strait of Hormuz will trigger a rise in global oil prices that could top $100 a barrel and possibly reach $150 a barrel, according to Fitch Solutions.
