Iran Attack: How will Israel’s response to Tehran affect oil prices? – BBC News Arabic

Iran launched its second direct attack on Israel on October 1, launching approximately 180 missiles, some of which penetrated Israeli air defenses, in response to two Israeli assassinations. One is for Lebanese Hezbollah leader Hassan Nasrallah in Beirut and the other is for Hamas Political Bureau chief Ismail Haniyeh in Tehran.

Israeli Prime Minister Benjamin Netanyahu vowed to respond at the time he sees fit, saying Iran will “pay the price for its big mistake,” while Tehran warned it would launch a larger attack if it was concentration.

As a result of the strike, oil prices rose by about 5%.

Medhat Youssef continues to BBC Arabic, “Any tension in the sources of oil and gas production, whether due to regional or international conflicts, could cause production or export disruptions, which reduce supply in the market increasing fear of stopping the supply of oil and gas, and therefore increasing demand.”

Youssef hypothesizes, “If Israel strikes Iran, there will be fears of disruption of supplies, meaning shipping and unloading, as 40% of the world’s oil and gas supplies come from from the Gulf region. It is an area full of petroleum resources, so the markets may see a panic situation due to the shutdown of shipping ports.”

Dr. Thomas O’Donnell, an academic and expert in energy and geopolitics, is concerned about targeting Iran’s refineries, which is an option and supported by Washington. He says, “It deprives the Iranian economy of gasoline and diesel, that is, preventing Iran from refining its crude oil and supplying diesel, gasoline and other products to the internal market, that is, hitting Iran’s internal economy. “.

O’Donnell believes that this option could have a positive effect on world markets, “because if Iran cannot renew its oil, it could send more oil to the market, which could lead to decrease in the price of oil.”

Iran currently produces about 3.9 million barrels per day, and exports about half of that, about 1.7 million barrels per day.

But if Israel targets oil export facilities, “it will prevent a large portion of the 1.7 million barrels per day of exports from reaching the world market, representing an even greater shock to the market than world.”

O’Donnell told the BBC that world markets would not be seriously harmed if Iranian oil were taken off the market, as OPEC can easily compensate for the shortage, until especially since it has at least five or six million barrels of oil per day. is holding back from the market, and there is also potential in the Western Hemisphere to add, so it will not be a crisis, although a temporary increase may lead to an increase,” he said.

O’Donnell believes that an increase in the price of West Texas Intermediate and Brent crude oil by about a dollar “is not a huge jump in prices.” But it brings back fears of war in the Middle East. “

O’Donnell believes that Iran is avoiding direct conflict with Israel, conducting periodic strikes against targets in Israel, and encouraging its arms to confront it is not clear that Israel is ‘try to provoke a war, but he may want to punish Iran.” “Iran and deliver a devastating blow to it, and in this case Iran will be very careful not to fall into this trap.”

German expert O’Donnell continues, “One option for Iran is to attack other Gulf states that it sees as allies of the United States and Israel, such as Saudi Arabia and the UAE, which are major oil producers, and attack their ability to export oil. But he dismissed this situation.

Iran did not threaten to attack Gulf oil facilities, but warned that any direct intervention by what it described as “Israeli supporters” against Tehran would push Iran to “attack” launch strong. “

on their foundations and interests” in the region.

The engineer Khaled Al-Awadi, an energy economics consultant in Ras Al Khaimah, expects the price of a barrel to rise by 40%, meaning that its price will be between $90-$100, if Israel and Iran retaliate and aim on oil resources.

Al-Awadhi continues, “The market is currently in a state of hope and fear, and the rise we have seen cannot be compared to the Russian-Ukrainian war, but ultimately the continuation of the war means more losses than gains. which will benefit the traders of war, because the effect will affect all sectors of the economy.”

Medhat Youssef predicts that non-oil producing countries will be most affected by the development of global prices, and the increase may relate to transport and manufacturing costs, energy bills and basic commodity prices, as is the case for countries such as Egypt and Jordan, especially since “their price structure includes some form of support and needs an immediate increase.” In the case of countries such as Algeria and Libya, they are oil producing countries and therefore rely on local production. “

According to estimates by the International Energy Agency, Saudi Arabia accounts for more than a third of OPEC’s production capacity and more than half of its additional production capacity. It is followed in order of production by Iraq, the Emirates, Kuwait, Qatar, Libya, Sultanate of Oman, Algeria, and Egypt.

The impact of the Ukrainian-Russian war cannot be compared to the wars in the Middle East, says Medhat Youssef.

After the war in Ukraine and the invasion of the country by the Russian army in February 2022, the price of oil rose to the highest levels in 14 years, and the price of a barrel of Brent crude came close to the threshold of $140, and inflation soared to higher levels that shook every market in the world, including commodity and grain markets.

A petroleum economist says the European and American decision at the start of the Ukraine war to end their dependence on Russian oil and gas led to a sharp rise in prices, before falling again , when the European countries were able to secure their needs, because all supplies come from the Arabian Gulf region and not from the Black Sea”.

The petroleum economist explains that fear leads to an increase in demand until the markets are saturated Here, if oil floods the markets, prices will go down if we accept that supplies are still continuous in the event of war. Just as happened since the Houthis began their attacks on ships in the Red Sea and threatened commercial shipping in mid-November, as the ships found alternative shipping routes, oil prices were not affected, but Suez Canal revenues were affected.

Regarding the current situation, as Medhat Youssef explains, “We should not forget that OPEC’s decision to reduce prices at the beginning of 2025 was due to an abundance in the markets, which led to a decline in prices from levels of $ 80. per barrel to $ 70 and $ 69 per barrel.

O’Donnell agrees that the price of oil has been falling for more than a year, even though OPEC+ has tried hard to raise the price by keeping around 6 million barrels of oil on back from the market for most of the year.

He continues, “At their meeting in early October, OPEC decided to continue holding oil back from the market, through voluntary cuts. In fact, things have reached the point where Saudi Arabia now sees a problem. They want the price to be there. at 90 or 100.” dollars per barrel to pay their country’s requirements, but if they cannot keep the current price below $70 per barrel, they will focus on increasing market share, and there was a statement by a minister Saudi said it could drop to $50 per barrel, but at least Saudi Arabia will retain a large share of the market, which is, of course, good news for the United States and its allies in Ukraine in their war against of Russia, because Russia will lose revenue because it sells at higher prices to India and China.

In this case, Russia may be forced to nationalize its oil industry to deal with the decline in income.

The strategic analyst O’Donnell believes, “It is time to reconsider the alternative conditions for the OPEC price ceiling and the sanctions imposed on Russian oil.”