Israel's threat of attacking Iran's oil production drives up int'l oil prices

Israel's threat to target Iran's oil production infrastructure, including gas and oil rigs, refineries and storage facilities, has heightened market concerns about international crude oil supply, leading to a significant spike in international oil prices during the U.S. trading session on Tuesday.

The price of both U.S. light crude oil and Brent Crude Oil Futures rose by more than 2 percent on Tuesday with the upward trend continuing into Wednesday.

The price of light crude oil futures for November delivery on the New York Mercantile Exchange reached 72.13 dollars per barrel in Wednesday morning trading while London Brent Crude Oil Futures for December delivery reached 75.74 dollars per barrel.

During the U.S. trading session on Tuesday, international oil prices surged by over 5 percent, reaching an intraday high, but later retreated as market sentiment gradually stabilized.

Tensions in the Middle East have heightened concerns about oil supply, yet analysts believe that it is unlikely to lead to a long-term and significant disruption in global crude oil supply.

"There is now uncertainty about where is the next target. Energy facilities, critical infrastructures could be the other target. Looking at where the prices will go, definitely it depends on where the destruction would be and how much oil is going to be taken off the market. But historically, we have seen that geopolitical factors, if the impact is not in a larger scale and could be mitigated, is not huge,” said Sara Vakhshouri, president of SVB Energy International, a U.S.-based strategic energy consulting firm.

Iran is among the world's top 10 oil producers, with a production of 3.277 million barrels per day in August this year, according to the monthly report from the Organization of the Petroleum Exporting Countries.

Market estimates suggest that Iran exports approximately half of its oil production. Investors are concerned that the escalating tensions between Israel and Iran, the potential attack on Iran's oil facilities or Iran's blockade of the Strait of Hormuz could heighten the risk of further increases in oil prices.

International oil prices are also facing widespread pressure from oversupply and weak demand. Several Wall Street investment banks including Goldman Sachs and Morgan Stanley have lowered their long-term oil price expectations, and Citigroup has projected that oil prices could fall to around 60 dollars per barrel by 2025.

Israel's threat of attacking Iran's oil production drives up int'l oil prices

Iran will deliver a "devastating" response if it comes under military attack, Iran's Foreign Ministry Spokesman Esmaeil Baghaei said on Tuesday, while stressing that Iran has never ruled out diplomacy in dealing with the United States.

Speaking at a press conference in Tehran about the negotiations between Iran and the U.S., Baghaei said that Israel has been deliberately portraying Iran's peaceful nuclear program as a so-called "Iranian nuclear crisis" and plays a destructive role in any potential talks between Iran and the U.S.

Baghaei called on the U.S. to ensure its foreign policy is not influenced by Israel.

"We cannot enter a diplomatic process without considering what has occurred over the past 10 to 15 years, and even the actions of the U.S. over the last seven to eight months. All of these require us to be extremely cautious in any diplomatic process. At the same time, we have repeatedly emphasized that Iran has never shied away from diplomatic channels," said Baghaei.

Responding to the U.S. sanctions and threats, the spokesman blasted the U.S. for being obsessed with using economic means to exert pressure, accusing the U.S. of talking diplomacy while simultaneously intensifying pressure on Iran behind closed doors.

He also reiterated that any military aggression against Iran by the U.S. or Israel would be met with a firm and forceful response.

Iranian public opinion generally views current Iran-U.S. relations as a complex game balancing diplomacy and military pressure. With no concrete solutions yet on core disputes such as missile-related issues, whether the two sides will reach an agreement or slide into confrontation remains to be seen.

Iran warns of 'devastating' response if attacked: spokesman