The shock attack by Hamas and Israel’s response risk a wider destabilisation of the region - and the global oil market is watching.
There is no suggestion that the fallout from the current situation will be comparable to what happened back then, but it could alter the geopolitical landscape of the Middle East in unpredictable ways. Israel has broadly pointed the finger at Iran following the attack. Tehran has denied involvement but President Ebrahim Raisi called it a “victory.”
That has helped keep a lid on oil prices in a market that has seen a huge loss of supply from Saudi Arabia, Russia and the rest of OPEC+.There is a chance that the US could take aim at this trade. The Islamic Republic currently sells the bulk of its crude exports to China, sending 1.5 million barrels a day - the most in a decade - in August, according to data intelligence firm Kpler.
For now, there’s no sign Tehran is moving to disrupt merchant shipping - something it has done in recent times, often in tit-for-tat measures.Hormuz has never truly halted. Not in the Tanker War of 1984 in which Iran and Iraq would routinely attack each other’s oil carriers, and not in more recent times when Tehran stepped up vessel seizures and harassment of merchant shipping.