And fired Iran A barrage of missiles hit Israel, Tuesday, in response to Israeli air strikes and attacks on the Iranian Republic’s allies in the region. Israeli Prime Minister Benjamin said Netanyahu Iran has made a grave mistake and will pay the price for it, while Iran has threatened a crushing response if Israel attacks it.
On Wednesday, the American news website Axios quoted Israeli officials as saying that Israel’s options include targeting Iranian oil production facilities and other strategic sites. Iran is a member of OPEC and its production is about 3.2 million barrels per day, equivalent to three percent of global production.
Iran’s oil exports rose this year to their highest levels in several years, to 1.7 million barrels per day, despite US sanctions. Chinese refineries buy most of these supplies. Beijing says it does not recognize unilateral US sanctions.
“Theoretically, if we lose all Iranian production, which is not our basic assumption, then OPEC+ It has enough excess energy to absorb the shock.”
The OPEC+ alliance, which includes OPEC and non-OPEC allies, reduces among them Russia Kazakhstan has been producing for years to support prices in light of weak global demand. Therefore, the alliance has a spare production capacity of millions of barrels.
The total cuts implemented by OPEC+ producers currently amount to 5.86 million barrels per day. Analysts’ estimates indicate that Saudi Arabia Able to increase production by three million barrels per day The UAE Able to increase it by 1.4 million barrels per day.
OPEC+ countries held a meeting on Wednesday to discuss commitment to production cuts. Sources in OPEC+ said that the coalition did not address the conflict between Israel and Iran.
An OPEC+ source familiar with the discussions said, “The only thing that was mentioned related to the geopolitical situation and the conflict was the expression of hope for non-escalation.”
UBS analyst Giovanni Stanovo said that while OPEC has enough spare capacity to compensate for the exit of Iranian supplies, most of this capacity is in the Gulf region in the Middle East and may also be at risk if the conflict escalates.
He pointed out that “the actual available spare capacity may be much less if attacks on the energy infrastructure in countries of the region are renewed,” adding that the West may have to resort to strategic reserves if severe disturbances occur.
It has not attacked Israel yet Iranian oil facilities. Oil sector analysts and security experts say that Israel may target Iranian oil refining sites and the oil port on Kharg Island, the port for about 90% of the country’s exports from… Oil Raw.
During the Iran-Iraq war in the 1980s, Baghdad attacked oil tankers around Kharg Island on many occasions and threatened to destroy the oil port.
“Iran and its proxies may target energy operations in other parts of the region if the current crisis turns into an all-out war in order to internationalize the price,” said Helima Croft of RBC Capital Markets, referring to the creation of a global energy crisis.
In 2019, a drone attack carried out by Iranian agents on oil processing facilities in Saudi Arabia briefly disrupted 50 percent of the Kingdom’s crude oil production.
Riyadh and Tehran have achieved some political rapprochement since 2019, which has helped ease tensions in the region, but moving relations beyond that is still difficult.
Oil prices have remained in a range between $70 and $90 per barrel over the past years, despite the war between Russia and Ukraine and the conflict in the Middle East.
But the outbreak of any large-scale conflict in the Middle East, followed by a significant impact on production, will inevitably push oil prices higher.
