Oil markets are prepared for interruptions while Israel – Iran Conflict intensifies

Since the Israeli-Iran conflict shows no signs of reduction, oil supply from the Middle East could become vulnerable if the two parts decided to attack vital energy infrastructures in the region, said the RBC capital markets, warning that energy and oil in particular are now “clearly in the sights”.

Israeli strikes on Iranian nuclear sites and military leadership at the end of last week intensified with Iran’s response with missiles to Israel, some of whom penetrated the Iron Dome Missilistic Defense system of Israel and hit the cities and energy infrastructures.

An Iranian missile attack caused damage to the refinery of Haifa in Israel during the weekend, causing a partial arrest, according to reports from the Israeli media, stating that the structure has remained operational.

While the conflict drags on its fourth day of Monday, the oil is now in the sights and a clear concern for the offer of the oil market, according to a RBC note transported by Bloomberg.

“The fact that both sides have targeted the energy infrastructure on the second day of combat represents a clear cause of concern,” analysts wrote.

The island of Iran Kharg – An important crude and shopping center that manages 90% of Iranian raw oil exports, could be targeted by Israel at some point, says RBC. The Iranian delegates, for their part, could affect the oil structures in nearby Iraq, the second largest OPEC oil producer after Saudi Arabia, according to the bank.

“The White House has probably tried to dissuade Prime Minister Netanyahu from a strike from the island of Kharg, since it could remove 90% of Iranian oil exports,” wrote the bank analysts.

“However, longer this conflict continues, the increase in the probability that Israel could try to reduce the funds that Iran would need to reconstitute its nuclear program.”

The greatest fear of the oil market is an interruption of flows through the Strait of Hormuz, the most vital raw lane in the world in which over 20 million barrels of crude oil pass every day.