Ubhar Capital: Escalating ME tensions amid Israeli-Iranian conflict

Ubhar Capital stated that the intensification of the Israeli-Iranian conflict caused a strong reaction in oil prices, with Brent crude rising between 9% and 14%, reaching prices between $75 and $78 per barrel. This price surge is fueled by concerns about potential disruptions in oil supplies as a result of the ongoing conflict.

The firm noted that if key oil infrastructure facilities are not targeted in the conflict, supplies will not be significantly affected. However, tensions are expected to impact supply in the range of 1 to 2 million barrels per day. Should the conflict expand to target oil assets in the Gulf region, the impact could rise to between 3 million and 5 million barrels per day.

Additionally, Ubhar Capital highlighted the potential risks related to the Strait of Hormuz, through which approximately one-third of global seaborne oil is transported, ranging from 17 million to 20 million barrels per day. Tensions in the Strait could lead to disruptions in global oil supplies, even if only a partial closure occurs. In more severe scenarios, if the Strait is completely closed, between 25% and 30% of global oil supplies could be at risk.

Potential Risks of the Israeli-Iranian Conflict Impacting Global Oil Supplies:

The brokerage firm added that such disruptions in oil supply could trigger a sharp rise in crude oil prices, leading to a global inflation surge. This would also result in further volatility in commodity markets, stock indices, and currency prices. The company pointed out that geopolitical unrest impacts investor sentiment, causing fear of taking investment risks, which could reflect on stock prices and the value of fixed-income instruments in global financial markets.