FALCONPOWERS – The Iranian attack on Israel earlier this week has increased the near-term geopolitical risks in the oil market, prompting some banks to raise their price expectations.
Iran launched an attack on Israel with over 300 drones and missiles late on Saturday in response to an alleged Israeli attack on its consulate in Syria on April 1. This Iranian response marks the first direct attack on Israeli soil, raising concerns about the widening scope of the conflict in the Middle East.
Citigroup raised its short-term oil price forecast to $88 per barrel from $80, citing price increases due to the risks. Any full-scale conflict between Iran and Israel could push oil prices to $100 per barrel.
The bank added that any de-escalation could lead to a sharp decline in prices, ranging from the late $70s to the early $80s per barrel.
Two Israeli ministers indicated that a response to Iran is not imminent, and Israel will not act alone.
