Oil prices could soar to $80/barrel and higher due to US attack on Iran’s nuclear facilities, — Bloomberg

The US attack on Iran and the subsequent possible developments could cause oil prices to soar to $80/barrel or higher.

This is reported by Bloomberg.

The oil market is reacting to US airstrikes on three Iranian nuclear facilities – in Fordow, Natanz and Esfahan. Tensions in the Middle East have increased, causing fluctuations in Brent crude prices, which rose 11% during the week. Further growth is expected after the escalation, which affects the region, which provides a third of the world’s oil production.

Financial markets are showing increased volatility, including options, freight and diesel prices. Analysts indicate that further Iranian reactions could affect oil infrastructure in the region, in particular in Iraq and the Strait of Hormuz – a critical route for oil exports from the Middle East.

“Much depends on how Iran responds in the coming hours and days, but it could put us on a path to $100 oil if Iran responds as it has previously threatened,” said Sol Kavonik, an energy analyst at MST Marquee. “This U.S. attack could lead to a flare-up in conflict, including Iran responding by attacking regional U.S. interests, including Gulf oil infrastructure in places like Iraq, or by blocking passage through the Strait of Hormuz.”

The maritime chokepoint at the mouth of the Persian Gulf is a vital conduit not only for Iranian supplies but also for supplies from Saudi Arabia, Iraq, Kuwait and other members of the Organization of the Petroleum Exporting Countries (OPEC).

“The market is looking for certainty, and that is now pushing the US into the Middle East theater of war,” said Joe DeLaura, a former trader and global energy strategist at Rabobank, adding that prices are now expected to rise when the oil market reopens. “But I think that means the US Navy will be required to keep the strait open,” he said, adding that prices could reach a range of $80 to $90 a barrel.

There have been no reported disruptions in oil supplies from the region, but traders expect further volatility. Analysts say any direct US intervention or attempt at regime change in Iran could cause a sharp rise in prices.

Earlier, USM reported that the US had launched 30 missiles from submarines at Iran’s nuclear facilities.