Israeli-Iran conflict expands and prolongs its growth, traders prepare for

**Source**: Wall Street News  

Israel's precise strike on Iran's energy infrastructure on Saturday has pushed the global oil market to the brink of new turmoil. Analysts warn that the expansion and long-term continuation of the conflict will inject more risk premiums into the crude oil market.  

According to the latest media reports, Israel's attack on Saturday temporarily destroyed natural gas processing facilities related to Iran's largest South Pars gas field and targeted fuel storage tanks. Local media said the strike triggered intense explosions and fires at the onshore Phase 14 natural gas processing plant and forced the closure of a production platform at the South Pars oilfield.  

Although the attacks focused on Iran's domestic energy systems rather than export facilities, traders and analysts are still bracing for more turbulence. Richard Bronze, Head of Geopolitics at energy consulting firm Energy Aspects Ltd., said: "Now that this threshold has been crossed, people will question whether Israel will attack more of Iran's energy infrastructure. We seem to be in an escalation cycle."  

Due to the outbreak of the Israel-Iran conflict, West Texas Intermediate (WTI) crude oil futures surged 14% to around $73 per barrel last Friday.  

The current oil risk premium continues to ferment. Bob McNally, a former White House energy official and President of Rapidan Energy Advisers LLC, warned:  

"The conflict is escalating and may last a long time. Its expansion to economic targets and causing civilian casualties should bring more risk premiums to crude oil at the start of this week."  

**Expansion and Long-Termization of Conflict: Strait of Hormuz as a Key Variable**  

According to CCTV News reports, the Israel-Iran conflict has continued to escalate recently, with both sides launching multiple rounds of mutual attacks and causing casualties. The Iranian President issued a tough warning that if Israel continues its aggressive behavior, it will face a "stronger and more violent counterattack" from Iran. Iranian officials also mentioned blocking the Strait of Hormuz as a key option.  

Wang Kunpeng, an observer for China Media Group News, said: How will this conflict develop, and will it become long-term? A time detail is worth noting. The Israeli Civil Aviation Authority stated that approximately 50,000 Israelis stranded abroad may need to wait weeks to return; U.S. and Israeli officials also said that Israel's military operations against Iran are expected to last for weeks and are being carried out with U.S. acquiescence. It can be inferred that Israel may assess the conflict to last about several weeks.  

Iran has in the past threatened to block the Strait of Hormuz, a key transit point in the Persian Gulf, and its Yemeni ally, the Houthi armed forces, has harassed passing ships in the region. JPMorgan predicts that if the Strait of Hormuz is closed, international oil prices could soar to $130.  

However, Vandana Hari, Founder of Singaporean energy consulting firm Vanda Insights, believes that concerns about the Strait of Hormuz may be exaggerated: "Although Iran has threatened to block the waterway multiple times over the years, it has never actually done so, and I expect it will not do so now."  

He further added:  

"We may need to see evidence of intensified war—wider destruction and more civilian casualties—to change this expectation and push the crude oil risk premium further higher."  

Despite heavy U.S. sanctions, Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), with a daily output of about 3.4 million barrels.  

The Paris-based International Energy Agency said the global oil market is well-supplied and ready to mobilize emergency reserves if necessary. President Trump posted on Truth Social on Sunday that the two warring nations should and will reach a peace agreement.  

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