by By Seher Dareen
London (Reuters) -Oil is likely to rise by $ 3-5 per barrel when the trade resumed on Sunday evening after the US had attacked Iran during the weekend, said market analysts, with a profit that is expected to accelerate only if Iran takes revenge and causes a major disruption of the oil facility.
US President Donald Trump said that he had “eras” the most important nuclear locations of Iran in strikes at night, in which he joined an Israeli attack in an escalation of conflicts in the middle -east when Tehran promised to defend himself. Iran is the third largest rough producer of OPEC.
Worldwide oil benchmark Brent crude oil could win $ 3 to $ 5 per barrel when the markets open, said Seb analyst Ole Hvalbye in a note. Brent settled at $ 77.01 a barrel on Friday and US West Texas Intermediate for $ 73.84.
“An oil price jump is expected,” said Jorge Leon, head of geopolitical analysis at Rystad and a former OPEC officer. “Even in the absence of immediate retribution, the markets are likely to praise in a higher geopolitical risk premium.”
Crude oil was established on Friday after the US had imposed fresh Iran-related sanctions, including two entities in Hong Kong, and terrorism-related sanctions, according to a notification on the website of the American Treasury Department.
Brent has risen by 11%, while WTI has won around 10% since the conflict started on 13 June, with Israel focusing on the nuclear locations of Iran and Iranian missiles that affect Tel Aviv.
Currently stable delivery conditions and the availability of reserve production capacity, among others, have the profit of limited oil. Risk premiums are usually blurred when no delivery took place, said Giovanni Staunovo, analyst at UBS.
“The direction of oil prices from here will depend on whether there are delivery disruptions – which would probably lead to higher prices – or whether there is a the – escalation in the conflict, resulting in a fading risk premium,” he said.
A senior Iranian legislator on 19 June said that the country could close the Strait of Hormuz as a way to hit his enemies, although a second MP said that this would only happen if the vital interests of Tehran were threatened.
About a fifth of the world’s total oil consumption goes through the street.
Seb said that every closure of the Zeestraat or overflow to other regional producers would “considerably increase” the oil prices, but said they saw this scenario as a cataract risks instead of a basic case given the dependence on China of Gulf crude oil.
Ajay Parkmar, director Oil and Energy Transition Analytics at Consultancy ICIS, said it was unlikely that Iran could force a blockage off the street for too long.
