Experts say the escalation of Israel’s war in the Gaza Strip could put further pressure on global oil and gas supplies disrupted by Russia’s aggression in Ukraine.

Currently, the price of black gold has risen relatively slightly as a result of the Israeli war following the bloody attack by Hamas on Israel on October 7. European benchmark Brent rose about 10 percent, while its U.S. counterpart rose about 9 percent. Prices are around $90 per barrel, which is still far from their historic levels.

“Israel is not an oil producer, and there is no major international oil infrastructure near the Gaza Strip,” says Eduardo Campanella, an analyst at UniCredit Bank.

Still, investors are in a state of anticipation, “aware of the risks inherent in the Middle East to global supplies,” confirms Stephen Innes, analyst at SBIM.

Smuggling Iranian oil to markets?

One of the main risks to the energy market is the direct intervention of Iran, which supports Hamas and is a staunch enemy of Israel.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), has had its production and exports affected by international sanctions for years. But as its production has increased over the past 12 months, it is suspected that oil is being smuggled into the market.

Helge Andre Martinsen, an analyst at DNB, told Agence France-Presse that the flow of black gold has proved decisive in controlling prices against a backdrop of high demand and supply shortages, which he considers “administrative”. (US President Joe) Biden turns blind.” “.

For his part, Eduardo Campanella points out that even if Tehran stays out of the conflict, “the West may decide to tighten economic sanctions on it or implement existing sanctions more effectively.”

Tehran could respond by closing the Strait of Hormuz, the world’s most important oil transit area, where the daily flow of oil carries more than 17 million barrels, according to SIP research, or 30 percent of all oil. the sea

Campanella said only Saudi Arabia and the United Arab Emirates have pipelines to send crude oil from the Gulf without going through the Strait of Hormuz.

What is the worst case scenario?

Campanella noted that the worst-case scenario, considered unlikely but unlikely by analysts, is that if sanctions are tightened, Iran will retaliate by attacking the oil facilities of Saudi Arabia, one of the world’s major producers and exporters.

In September, attacks targeting Saudi Arabia’s oil infrastructure were enough to temporarily halve the country’s output and send Brent crude prices up nearly 20 percent in a single day. Yemen’s Houthi rebels, backed by Tehran, claimed responsibility for the attacks.

Experts point to previous oil shocks, the first fifty years ago in the wake of OPEC’s embargo on Israel’s allies in the midst of the Yom Kippur War, and then the second shock in 1979 in the wake of the Iranian revolution. Crude oil prices soared within months, weakening advanced economies.

Impact on LNG supplies

In the case of gas, the effects appear much faster. In mid-October, gas prices on the Dutch Gas Futures Trading Platform (TTF), the European benchmark for natural gas, rose by a third of what they were before the October 7 attack.

According to Stephen Innes, the war “seriously threatens the regional natural gas market and could impact LNG supplies.”

In turn, says Giovanni Stanovo of UPS, “Although European stocks are almost full, they are not enough to get through the winter if all imports stop.”

Meanwhile, the American company Chevron has suspended its operations at the Tamar site on the Israeli coast on instructions from the country’s authorities.

According to Innes, the field represents “about 1.5 percent of the world’s liquefied natural gas supply” and supplies mainly the domestic market, followed by Egypt and Jordan.

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The consequences of closing Israel’s largest gas field, the Leviathan field, would be more worrisome, according to analysts who pointed to a price spike of 345 euros per megawatt-hour at the start of the war in Ukraine. A record high.

Additional resources • AFP