Oil prices expected to rise after we attack Iran

The Brent crude barrel was on sale for around $77 on Friday, but could increase by another $5 if the market is open at 11pm on Sunday.Photo: Yonhap/EPA

Oil prices are expected to rise as trading week begins. US attack on Iran It surprised the fear of the escalation of regional conflict that could close the important straits of the Hormuz shipping route.

Brent crude barrels were on sale for around $77 on Friday. It rose more than 10% since mid-June, when Israel encouraged a missile strike against Tel Aviv with attacks at Iranian nuclear sites.

The decision to follow Israel when launching a US attack on Iran over the weekend could potentially rise another $5 when the market is open, according to forecasts from oil market analysts.

This week’s trading begins Sunday at 11pm in the UK.

“We expect an oil price jump,” said Jorge Leon, head of geopolitical analysis at energy intelligence company Rystad and a former employee of OPEC, a group of major oil producers.

“In extreme scenarios where Iran responds with a direct strike or target with local oil infrastructure, oil prices will skyrocket. Without immediate retaliation, the market could potentially price a high geopolitical risk premium.”

Brent crude, a traditional benchmark global oil price, can make between $3-5 per barrel when the market opens, Cebu analyst Ole Hvalbye said in a memo.

Wall Street Bank JP Morgan has previously predicted that oil prices could rise to $130 if the Middle Eastern conflict closes the Strait of Halmuz.

Iranian officials have previously threatened to block the straits, the fifth conduit of world oil consumption, if Tehran’s interests are threatened.

Such retaliation can have a major knock-on effect on the global economy, and the resulting shock in oil prices puts a period of high inflation at stake as drivers pay more for gasoline and transportation costs.

Brent Crude settled on Friday at $77.01 per barrel, with the US West Texas Intermediate (WTI) benchmark at $73.84.

Some analysts have noted that it reduces the risk of long-term disruptions in transportation routes and that most of Iran’s oil exports to China will pass through the Strait of Hormuz.

If oil prices rise to $130, that’s Aftermath of Russia’s invasion of Ukraine.

Brent Crude’s all-time high was $147.50, set in July 2008 just before the global financial crisis plunged prices.