Israel is taking into account the concerns expressed by the United States regarding a potential retaliatory strike on Iran’s energy infrastructure; however, it will ultimately determine its course of action in response to the Iranian missile attack, as stated by the office of the Israeli prime minister.
The global community and the oil market are closely monitoring Israel’s reaction to the missile attack from Iran that occurred on October 1. The option of targeting Iranian oil infrastructure remains on the table, contributing to heightened tensions in the region and uncertainty in the market regarding the possible escalation of the conflict throughout the Middle East.
A statement from Benjamin Netanyahu’s office, reported by Bloomberg on Tuesday, indicated, “We consider the views of the United States, but our final decisions will be guided by our national interests.”
This statement followed a report from the Washington Post, which indicated that Netanyahu had informed the U.S. Administration of Israel’s preference to target military sites in Iran rather than oil and nuclear facilities.
According to the Washington Post, Netanyahu and President Joe Biden had a conversation last week, as confirmed by two officials familiar with the discussions.
One official mentioned to the Post that Israel’s retaliatory measures would be designed to avoid any appearance of “political interference in the U.S. elections.”
In recent weeks, market speculation has intensified, with analysts assessing the likelihood of Israel attacking Iranian oil facilities, which could provoke a counter-response from Iran. This retaliation might manifest through Iranian proxies targeting oil infrastructure in other Middle Eastern nations or attempts to obstruct the Strait of Hormuz.
Most analysts indicate that the spare capacity within OPEC, primarily held by Saudi Arabia and the UAE, is sufficient to offset any potential loss of supply from Iran.
A more substantial disruption in supply from the Middle East could result in oil prices reaching triple digits. However, analysts currently assess the likelihood of attacks on oil infrastructure in other regional producers or the closure of the Strait of Hormuz as low.
Recent statements from Israel, suggesting that it is “listening” to the U.S. stance, have alleviated fears regarding a potential loss of oil supply from Iran and the broader Middle Eastern area, leading to a 4% decline in oil prices early on Tuesday during Asian trading.
