Following Israel’s missile and drone attacks on Iranian facilities in Isfahan and Tabriz, there are speculations about potential next moves in the conflict and their implications for the global oil market.
Israel’s actions have put it at odds with its key sponsor, the US, which had publicly advised against direct attacks on Iran. This highlights the strong sentiment among Israeli hardliners to respond forcefully to Iran’s direct attacks on Israeli soil.
However, both the US and Iran’s main sponsor, China, are strongly opposed to any Israeli actions that could significantly increase energy prices. The US is facing upcoming elections, and President Biden is keen on avoiding a surge in gas prices that could impact his chances of re-election. Similarly, China’s economy would be adversely affected by sustained high oil prices.
Despite the opposition from the US and China, Israel may consider further attacks on Iran’s nuclear facilities to delay its path to developing nuclear weapons. The US might not publicly support such actions but may tacitly tolerate them.
Iran, in response, could retaliate by escalating attacks on Saudi Arabia’s oil facilities or disrupting shipping in the Red Sea through the Houthis. Such actions could disrupt the global oil supply and lead to a spike in prices.
The situation remains highly volatile, and any misstep from either side or the numerous proxies involved could escalate the conflict into a full-blown war, potentially causing chaos in the global oil market.
