**Oil Prices Surge as Middle East Tensions Escalate**
The global oil market was jolted awake this week as Iran launched a massive ballistic missile attack on Israel, sending crude prices soaring by over 5% on Tuesday. The sudden escalation in tensions has shattered the complacency that had gripped the market, with traders now scrambling to reassess the risks of a supply disruption in the Middle East.
Experts warn that Israel’s vow of a “painful” response to Iran’s attack could target the Islamic Republic’s oil infrastructure, potentially crippling its ability to export crude. With Iran producing at a five-year high of over 3 million barrels per day, any disruption to its supplies could have a significant impact on the global oil market.
Retired U.S. Army Colonel Jack Jacobs notes that an attack on Iran’s nuclear facilities, while possible, would be difficult to execute due to their hardened structures. However, a strike on Iran’s oil facilities is seen as a more likely scenario, which could trigger a devastating response from Tehran.
The implications of such an escalation are dire, with analysts predicting that oil prices could surge by at least $5 per barrel if Iran’s oil exports are taken offline. Furthermore, Iran could retaliate by threatening the 13 million barrels per day of crude and 5 million barrels per day of products that flow through the Persian Gulf, potentially sending oil prices skyrocketing in increments of $10 per barrel.
While OPEC has 5.6 million barrels per day of spare capacity that could be brought back to the market, experts warn that this may not be enough to offset the impact of a major disruption in the Persian Gulf. As the situation continues to unfold, one thing is clear: these are dangerous times for oil markets, and the world is holding its breath.
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