By Vasilis Kaltsas

Rally recorded oil prices on Friday after Israel’s attack on Iran.

At 9:10 am Friday morning, Argon Brent is negotiating at $ 75 a barrel with a rise of 8%, while at dawn the rise was up to 11%.

Markets are anxiously monitoring the events in the Middle East, which in the direct scenario of further escalation of tensions could lead to further prices.

The most worrying scenario would be the closure of the strait of the Ormuz, a crucial passage for one fifth of the world crude oil. An exclusion of this 21 -mile section between Iran and Oman would significantly distract oil prices.

It is the only sea passage for the Persian Gulf and are therefore of great strategic importance. To the north lies Iran and to the south the United Arab Emirates and the Mousadan, an Oman exquisite.

It is still too early to say whether the blow will affect oil transport in the Middle East, as it will depend on how Iran will pay back and whether the US will intervene.

Concern for escalating tensions

Market concern lies in the amount of Israel’s hit will turn into a general conflict or not.

Iran’s supreme leader, Ayatollah Ali Hameni, said Israel would be punished “hard” for the attack he launched against his country’s nuclear program, which killed many Iranian army commanders.

“The Zionist regime (Israel) reached out his vicious and bloody hand to a crime against Iran this morning and revealed his nasty nature. With this attack, the Zionist regime has prepared a bitter fate for himself, which he will surely receive, ”he said.

And the spokesman for Iran’s Armed Forces warned that Tehran would retaliate after Israel’s attacks, saying that the US and Israel would “pay dearly”, despite Washington’s claims that it had not been involved.

Potential domino

A possible escalation of hostilities and further rise in oil prices would bring a domino to the world economy.

An additional increase in crude oil prices, – basic fuel of many industries – would also affect the cost of producing many products and foods and delays in the supply chain.

In such a case, inflationary pressures would return worldwide, causing extra headaches in governments and central banks, which could change their interest rates.

What do analysts say

“It’s too early to say, but I think the market is worried about the closure of the strait of Ormuz,” one analyst in Reuters told.

MST Marquee’s Senior Energy Analyst, Saul Kavonic, said Iran could limit up to 20 million barrels daily the supply of oil through infrastructure attacks or by limiting the passage of Ormuz’s straits to an extreme scenario.

“Markets are now concerned that Iran will retaliate either Israeli or US targets, leading to a major military escalation and a possible interruption of oil supply, said Andy Lipow, president of the Lipow Oil Associates.

“Iran is well aware that President Donald Trump focuses on reducing energy prices,” Lipow told CNBC, adding that Iran’s actions affecting Middle Eastern oil supplies and consequently increased US gas prices and gas prices.

“The area (Middle East) is a huge oil supplier and obviously there is now the thought that part of this supply could be interrupted as demand is growing,” notes Jessica Amir, a strategic analyst at Moomoo.

“Slow oil has since broken over the downward trend of June 2022, with a high move around $ 78 or even $ 80 now breathing. The question now is whether it is a typical geopolitical spasmodic reaction of markets, which leads to a lot of advertising campaign without tradition. Or if the US is really on the brink of navigation in a war in the Middle East, “says Matt Simpson, a City Index market analyst.

“The key question now is whether this marks a brief ignition or the beginning of a wider regional escalation. If the situation is quickly diverted, prices may recede. But if tensions increase-especially with any threat of oil supply roads-they will maintain upward pressure on the argon and assets-shelters, “said Charu Chanana, head of SAXO strategic investment.

Risk premium

In addition, there are concerns about whether the risk premium will increase. A larger premium premium for any possible disorders of supply may further pressure oil prices. Markets have already begun to invoice the risk of significant supply disorders from an area representing about one -third of world oil production.