Analysts fear Israel-Iran conflict will push up oil prices above $90 per barrel

Oil and gas analysts were on Sunday unanimous in their projection that the global price of crude oil will rise further on Monday, above the $90 benchmark following Iran’s attack on Israel over the weekend.

The analysts from Saxo Bank and UBS projected that Oil prices would spike if Israel retaliates against the attack from Iran.

It would be recalled that Iran launched explosive drones and missiles at Israel late on Saturday in retaliation for a suspected Israeli attack on its consulate in Syria on April 1, a first direct attack on Israeli territory that has stoked fears of a wider regional conflict.

Concerns over how Iran would rAespond to a strike on its embassy in Damascus helped prop up oil prices last week, with Brent crude reaching a peak of $92.18 a barrel on Friday, the highest since October.

By the end of the day, the price had adjusted, with Brent crude closing 71 cents higher at $90.45, and U.S. West Texas Intermediate crude futures gaining 64 cents to settle at $85.66.

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In line with previous trends, analysts anticipate that a response from Israel could further elevate crude oil prices, surpassing the $90 per barrel benchmark.

“Oil prices might spike at the opening as this is the first time Iran has struck Israel from its territory. How long any bounce will last will depend on the Israeli response.

“Also, today’s G7 virtual meeting needs to be monitored, with an eye on if they target or not Iranian crude exports,” said UBS analyst Giovanni Staunovo.

Furthermore, another critical aspect to consider is the potential impact on the flow of oil through the Strait of Hormuz, which accounts for about one-fifth of the world’s daily oil consumption.

“Crude prices already included a risk premium, and the extent to which it will widen further almost exclusively depends on developments near Iran around the Strait of Hormuz,” said Ole Hansen at Saxo Bank.

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