(Oil Price) – Brent crude on Monday was up nearly 3%, breaking past the $80 threshold as markets attempted to cautiously price in a potential supply disruption should Israel attack Iran’s oil and gas facilities.
On Monday at 11:43 a.m. ET, Brent crude was trading up 2.86% at $80.28, for a gain of $2.23 on the day, while the U.S. benchmark, West Texas Intermediate (WTI), was trading up 3.04% at $76.64, for a gain of $2.26 on the day.
In a note to clients published by MSN on Monday, ANZ Research predicted a “relatively small” supply disruption should Israel target Iran’s oil industry, and cautioned that further by indicating that they saw “a direct attack on Iran’s oil facilities as the least likely response among Israel’s options”.
Earlier on Monday, oil was trading flat as traders awaited some sort of indication from Israel.
The latest spike in oil prices began in earnest last week after President Joe Biden stated that there had been discussions about Israel’s plan for retaliation, and that could include targeting oil and gas infrastructure. On Friday, Biden suggested that Israel should direct its attack away from oil and gas.
Analysts are split on the extent of potential disruption should Israel target Iran’s oil and gas infrastructure, with no clear indications of what might be targeted.
RBC Capital Markets has suggested high-level disruption could be felt if Israel hit the key artery for Iranian exports at Kharg Island, and disabled shipping, as reported by CNBC. Likewise, Wood Mackenzie told CNBC on Monday that the worst-case scenario would be an Iranian attack on the Strait of Hormuz, handling a sizable chunk of global oil exports.
By Charles Kennedy for Oilprice.com
