Will Israel hit Iranian oil infrastructure? And, what part of it? To what effect on markets, and geopolitics, (i.e., Mideast, OPEC, Russia and Ukraine war)? A video report.
MAIN POINTS (see transcript):
1. What if Israel hits Iran oil infrastructure in retaliation for missile strikes on Tel Aviv on Tuesday night? 1.a. The difference effects of hitting Iranian refineries vs oil export terminals In itself, neither target would make big difference in the market. The market would immediately jump, of course, but in principle the effect would be small. 1b OPEC+ and Western Hemisphere have plenty of spare capacity.
2. Consider Saudi market tactics … reportedly they want to now go for share over price support, as price support is failing after well over a year of output cuts (about 6 mb/d). Note: Shortly after this recording the Saudis repudiated the WSJ that reported the switch in tactics to defending share. Likely they’ll now want to wait and see what happens to Iranian exports, or if this Israel-Iran tit-for-tat gets out of hand.
3 Geostrategic assessment of how neither Iran (certainly) nor Israel (pretty certainly, till now at least) do not want this to go to a regional war. And the UA certainly doesn’t. So, makes no sense for Iran to escalate after an Israeli attack on their oil by hitting UAE, Saudi, etc. oil facilities and triggering a big geopolitical-oil crisis drawing in the USA. But, if they cannot avoid a big war with Israel, all bets are off in their expected response-desperation. 4. Re-thinking Russian Oil Price Cap Policy —
4. Last point is about how the market is going into multiple year downturn (unless Israel decides to go for a big Mideast war with Iran). This means theat, IMHO, now is a time that USA/G7/NATO/EU can reassess if the oil price caps, which are not working, can be replaced with a policy of actually taking Russian oil offline. See what you think of this point. –
Best, Tom O’Donnell (posted in Berlin)
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