BAKU, Azerbaijan, June 16. Oil prices are poised to rise sharply if military tensions between Israel and Iran continue to escalate and threaten shipments through the Strait of Hormuz, Netherlands-based ING banking group warns in its latest market commentary, Trend reports.
On Monday morning, oil extended its gains for a fourth consecutive day as hostilities between the two countries intensified, fueling concerns about energy security and global supply disruptions.
Over the weekend, Israel conducted a series of strikes targeting Iran’s domestic energy infrastructure. A natural gas processing facility linked to the South Pars field was temporarily knocked offline, triggering a major explosion and fire at the onshore Phase 14 gas plant and forcing the shutdown of a production platform.
Although the attacks have so far avoided export infrastructure, ING analysts note that even targeted damage to Iran’s domestic system raises broader supply risks — especially given Iran’s key role in global oil markets. The country, which remains under U.S. sanctions, is the third-largest OPEC producer, pumping around 3.3 million barrels per day (bpd) and exporting approximately 1.7 million bpd.
“The loss of this supply would eliminate the surplus projected for the fourth quarter,” ING stated, emphasizing that market tightness could intensify rapidly if disruptions persist.
The banking group also highlighted OPEC’s 5 million bpd of spare capacity as a potential buffer. However, in the event of a more serious supply shock, that capacity may need to be deployed faster than expected to avoid extreme price spikes.
The biggest concern, ING warns, is a scenario in which shipping through the Strait of Hormuz is disrupted. As nearly one-third of global seaborne oil passes through the strategic chokepoint, any threat to its security could send crude prices soaring.
Speculative activity is also on the rise. The latest data shows that net long positions in ICE Brent futures climbed by 29,159 lots last week to 196,922 — the highest level since April 1. In NYMEX WTI, net longs rose by 16,056 lots to 179,134, the highest since late January. ING attributes this to both the entry of new long positions and the liquidation of shorts, reflecting heightened market bullishness amid the geopolitical uncertainty.
Israel launched airstrikes on Iran in the early hours of June 13, killing a significant number of military personnel. Among the dead were Iran’s Chief of the General Staff Mohammad Bagheri, IRGC Commander-in-Chief Hossein Salami, Khatam al-Anbiya Central Headquarters Commander Gholamali Rashid, and IRGC Aerospace Force Commander Amir Ali Hajizadeh. Nine nuclear scientists and several high-ranking officials were also reported killed.
That same evening, Iran responded with a large-scale attack, firing more than 150 ballistic missiles and over 100 drones at Tel Aviv and other locations. The strikes caused civilian casualties and extensive damage.