(Bloomberg) -- Israel’s vow to retaliate against Iran for a massive missile attack on the country is bringing a focus on oil supplies from the Persian Gulf, and keeping markets on edge.
Crude prices in London have increased about 4.5% in the past three days. Until now, the market has been largely unaffected by escalating tensions in the region as shipments of physical oil barrels haven’t been interrupted. Any disruption to supplies from the region would drive oil much higher, a major risk for the US with elections just about a month away.
While it’s unclear how Israel will respond to Iran, various scenarios potentially range from hitting military targets to oil installations and even nuclear sites. The Persian Gulf country is the third-largest oil producer in OPEC. Crude supplies amounting to about a fifth of global demand and a large amount of liquefied natural gas pass through the Strait of Hormuz along the Iranian coast. Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Qatar send shipments through the key waterway.
Iran has said its latest missile barrage was in response to Israel’s attacks on its most important proxy militant group, Hezbollah, and the killing of its leader, Hassan Nasrallah.
Also read: Biden Seeks to Deter Israeli Attack on Iran Nuclear Sites
Here’s a map showing Iran’s major energy installations, including oil and gas fields, pipelines, refineries and storage terminals:
--With assistance from Julian Lee.
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