BAKU, Azerbaijan, June 13. Oil prices may surpass $150/bbl if Iran-Israel tensions persist, Trend reports via the Netherlands ING banking group.
Oil prices surged more than 7% this morning following reports of Israeli airstrikes targeting Iranian nuclear and military sites — a significant escalation in Middle East tensions that has sharply increased geopolitical risk premiums in global energy markets, the Netherlands-based ING banking group said in a market commentary.
The ING analysts note that unlike previous attacks, this round of strikes reportedly includes Iranian nuclear facilities, raising the stakes dramatically and fueling concerns over retaliation from Tehran. "This is a significant escalation... It will only lead to further uncertainty and increase the risk that regional energy supplies are disrupted”.
Supply Disruptions Loom
Iran currently produces approximately 3.3 million barrels per day (b/d) of crude oil, exporting around 1.7 million b/d. In the event of sustained conflict, ING analysts suggest it is “not too difficult to envisage” scenarios where this supply could be disrupted, particularly if upstream or midstream oil infrastructure is targeted.
Such disruptions could push the oil market — currently in surplus — into a deficit during the second half of the year. ING estimates that even a partial loss of Iranian exports could send Brent crude up to $80 per barrel, though prices may eventually stabilize near $75/bbl depending on the global supply response.
Strait of Hormuz in Focus
ING warns that continued escalation could jeopardize shipping traffic through the Strait of Hormuz — the vital maritime chokepoint through which about a third of global seaborne oil trade, or roughly 14 million b/d, transits. Disruption of flows through the strait could send Brent crude prices soaring to $120/bbl, with potential to surpass the 2008 record high of nearly $150/bbl if tensions persist.
The threat also extends to the global liquefied natural gas (LNG) market. Qatar, which accounts for around 20% of global LNG trade, exports its supplies exclusively via the Strait of Hormuz. ING warns that “there is no alternative route,” and any blockage could severely tighten LNG supply, pushing European gas prices sharply higher.
Strategic Response Options
Governments may be forced to draw on strategic petroleum reserves (SPR) to offset potential supply shortfalls. The U.S. currently holds over 400 million barrels in its SPR, positioning it to lead any coordinated release.
In addition, the Organization of the Petroleum Exporting Countries (OPEC) could tap into its estimated 5 million b/d of spare production capacity. However, ING cautions that most of this capacity is also located in the Persian Gulf. “If we are seeing disruptions to oil flows through the Strait of Hormuz, this spare production capacity will be of little help,” analysts said.
ING concludes that any sustained threat to the Strait of Hormuz would likely trigger a globally coordinated response to safeguard energy transit through this critical route.