Oil rises: Israel hints at attack on Iranian oil and gas infrastructure

Crude oil prices rose amid ongoing geopolitical tensions following Iran’s 200-missile fire on Israel.

Since the attack late Tuesday, there have been clashes between Israeli ground forces and Hezbollah in southern Lebanon. Israeli Prime Minister Benjamin Netanyahu vowed revenge and raised fears of a full-scale war. Seven Israeli soldiers were killed in fighting in southern Lebanon on Wednesday, the Israel Defense Forces said in a statement.

The latest round of escalation was triggered by the Israeli assassination of Hezbollah chief Hassan Nasrallah and Hamas political leader Ismail Haniyeh.

The Iranian missile attack was largely thwarted.

Oil prices reacted with some caution, despite rising over 2% on Wednesday morning.

On Wednesday, October 2, at 4:07 p.m. ET, Brent crude oil traded up 1.56% at $74.71 a barrel, while West Texas Intermediate (WTI) traded up 1.66% at $70.99, just above the $70 mark.

However, oil prices could rise much higher if Israel follows through on its threat and targets Iran’s oil and gas infrastructure in retaliation.

Israeli media Citing officials in Tel Aviv, it said on Wednesday that Israel could target Iran’s strategic energy infrastructure, including oil and gas rigs or nuclear facilities, as it has done in the past. Another main target could be Iran’s air defense systems. An attack on Iran’s oil and gas infrastructure would have the greatest economic impact and would send shockwaves through oil markets.

By Charles Kennedy for Oilprice.com

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