Yesterday, Tuesday, Israel threatened, through its Prime Minister Benjamin Netanyahu, to launch a strong strike against Iran in response to dozens of missiles that dropped it on several Israeli sites, which led to expectations that Iranian oil and gas fields would be a potential target, and that targeting them would cause a global energy crisis that would begin with a rocketing rise in prices. Energy.
Bloomberg said that although striking Iranian oil facilities could cause significant economic damage to Tehran, this could lead to a massive rise in oil prices globally, which could cause widespread economic repercussions.
While Iran’s vast oil infrastructure, which includes huge oil fields, pipelines, export terminals and refineries, represents a tempting target for Israeli strikes – according to Bloomberg – experts warn that this step may backfire.
Iran’s oil industry is a mainstay of its economy, and despite sanctions imposed by the United States and other Western powers for years, Iran still exports between half and two-thirds of its oil, and most of that oil ends up in China.
China’s imports of Iranian oil have risen continuously in recent years, reaching about 1.8 million barrels per day. This means that any disruption to the export of Iranian oil will greatly affect Tehran’s economy and will also harm the economy of China (the second largest economy in the world), and thus will harm the global economy.
Increase in prices
Yesterday, oil prices rose $5 per barrel, as a result of escalating geopolitical tensions. Analysts point out that successful strikes on Iranian oil production or exports could raise prices further, a scenario that could destabilize the global economy.
Bloomberg notes that cutting off Iranian oil supplies will force Chinese refineries to increase their purchases from other major suppliers, including Russia. This shift could lead to greater financial support for Russia’s war effort in Ukraine, further complicating the broader geopolitical landscape.
Risks of escalation
Military analysts warn that any such Israeli attack could lead to retaliatory actions by Iran, leading to further escalation in the region. Israeli leaders find themselves under pressure to balance their desire to weaken Iran with the need to avoid entering a never-ending spiral of violence.
“Israel needs to carefully consider the broader consequences of such strikes,” a military analyst told Bloomberg. He added, “While targeting the Iranian oil industry may weaken Tehran, rising energy prices and economic repercussions may lead to stronger reactions from Iran.”
These challenges come at a time when some analysts indicate that oil prices may decline in 2025 due to excess supply, but any military action against Iran’s oil infrastructure may change this trend.
