The attack draws the U.S. into offensive operations directly against Iran and escalates a conflict that began a week and a half ago, when Israel launched its own campaign of expansive airstrikes.
But while global markets are expected to see an initial jolt, there are other mitigating factors that could soften the blow.
Based on the closing price of Brent crude on Friday, a 10% jump would send the global oil benchmark to nearly $85 per barrel.
Iran’s ability to retaliate is constrained, Kpler noted, saying a shutdown of the Strait of Hormuz or attacks on energy infrastructure belonging to the Gulf Cooperation Council—comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE—remain highly unlikely.
Still, the geopolitical shock from America’s unprecedented attacks on Iran should result in more crude supplies reaching the market and easing any price spikes.
Kpler said an early OPEC+ output boost for August of 411,000 barrels per day or more is increasingly likely. That would add to a series of similar production hikes in recent months.
On Sunday, Iran’s parliament approved the closure of the strait, though security officials have yet to sign off on it.
Such a closure might entail use of mines, patrol boats, aircraft, cruise missiles, and diesel submarines, while clearing the strait could take weeks or months.
But closing the strait would also choke off Iran’s own oil exports, more than 90% of which go to China, and devastate the Iranian economy.
