Israel-Iran: soaring oil prices, tense markets

The war between Israel and Iran triggered a surge in oil prices, with a rise of 7% at the opening, and as much as 9% during the session for Brent, the world benchmark. This market reaction reflects a major fear: a supply shock on a still-fragile market.

Iran produces between 3 and 4 million barrels a day, i.e. over 3% of the world’s oil, making it the third-largest OPEC producer. Although the Israeli strikes did not hit Iranian refineries, the risk of regional escalation weighs on production and above all on maritime traffic in the Strait of Hormuz, through which 20% of the world’s oil and liquefied gas passes.

Fears of logistical blockages or retaliatory attacks could disrupt global supplies, particularly to Asia and Europe. As a result, stock markets retreated, while gold climbed, signalling a retreat to safe havens.

This surge came at a time when the International Energy Agency (IEA) was forecasting a drop in prices due to overproduction. In the space of a few hours, the market went from oversupply to fear of shortage, demonstrating its great volatility.

The conflict is also affecting air traffic, with flight suspensions to and from the Middle East. Tel Aviv airport is closed until further notice, as is Iranian airspace. These measures will have a cost

source: L’Express