Middle East in Crisis; Some Financial Institutions Predict Oil Prices to Rise

Reuters reports that the Islamic Republic's attack on Israel has increased geopolitical risks in the global oil market in the short term, and some international financial institutions predict that oil prices will rise. Late on Saturday, April 13, the Islamic Republic launched over 300 drones and missiles towards Israel. This first direct attack by the Iranian government on Israeli territory has sparked fears of a widespread war in the Middle East. According to Reuters, on Monday, April 15, Citibank, an American financial institution, raised its short-term oil price forecast from $80 to $88 per barrel due to the increased likelihood of regional war. Although Citibank stated that it believes the current market is not pricing in the potential for an ongoing comprehensive conflict between Iran and Israel, which could push oil prices above $100 per barrel. The French bank and financial company Société Générale also noted that it will likely consider geopolitical risks in the foreseeable future in crude oil prices. Société Générale predicts that North Sea Brent crude will reach $91 per barrel in the second quarter, and West Texas Intermediate will exceed $87: 'We still consider direct military action by the U.S. and Iran to be an ongoing risk. The likelihood of such action has increased from 5% to 15%; in such a scenario, oil prices could easily rise above $140.' Meanwhile, the oil price index, which had risen on Friday due to predictions of Iran's retaliatory attack, showed a slight decrease on Monday. The UK, France, Germany, and the EU's foreign policy chief have all joined Washington and UN Secretary-General Antonio Guterres in calling for restraint in the Iran-Israel dispute. JP Morgan stated that the outlook for oil seems to depend on any military response from Israel to Iran's attack: 'Beyond the short-term spike driven by geopolitical factors, our base oil price for Brent remains at $90 for next month.' Ebrahim Raisi commented on the attack on Israel: 'It was a demonstration of Iran's missile and drone capabilities.' On the line: Public opinion in Iran regarding the Islamic Republic's attacks on Israeli territory. Oil prices fell following lower-than-expected economic growth in China and a strengthening U.S. dollar. Oil prices decreased after the Islamic Republic's attack on Israel. Major transportation companies welcomed the U.S. and UK attacks on the Houthis; tankers changed course. Oil and gold prices rose following the U.S. and UK attacks on the Houthis. Reuters: Russian oil has been loaded onto tankers under sanctions related to the Islamic Republic. Grossi: Drone attacks on the Zaporizhia nuclear power plant must stop. Extensive Russian attacks on fuel and energy centers in Ukraine; a power plant in Kyiv was targeted. Italy described the Islamic Republic's attack as a 'major mistake' for Tehran and 'positive' for Israel. Diplomatic pressures on the Islamic Republic continue; Germany summoned the Iranian government's ambassador. G7 leaders condemned the 'unprecedented' attacks by the Islamic Republic against Israel. Consequences of the Islamic Republic's attacks on Israel; many flights from the country's airports were canceled.