Oil markets are being too complacent given the risk of major supply disruptions in the Middle East, analysts told CNBC on Thursday, with one warning that crude futures could rally to more than $200 a barrel.
It comes amid speculation that Israel could be planning to launch a retaliatory attack on Iran targeting its oil infrastructure — a prospect which would likely deliver a rude awakening to bearish energy market participants.
Iran, which is a member of OPEC, is a major player in the global oil market. So much so, it is estimated that as much as 4% of the world’s supply could be at risk if Iran’s oil infrastructure becomes a target for Israel.
Speaking to CNBC’s “Street Signs Europe” on Thursday, Bjarne Schieldrop, chief commodities analyst at Swedish bank SEB, said escalating tensions in the Middle East could have dramatic consequences for the market.
“If … you really took out the oil installations in Iran, force down the exports by 2 million barrels, then the next question in the market will be what will happen now in the Strait of Hormuz? That, of course, would add a significant risk premium to oil,” Schieldrop said.