Escalating crisis in Iran: what will happen to oil and gas and whether there is a threat of radiation

The US intervention in the Iranian-Israeli conflict has increased risks for the markets. Oninvest analyst Konstantin Gnennyi discusses what investors should pay attention to after the resumption of trading at the beginning of the week.

Perhaps the price will rise short-term by 10-15% purely on hype and uncertainty. There are no signs that Iran's oil infrastructure is being destroyed. Tehran will not stop oil exports of its own free will, because it is a huge amount of money coming into the hands of the Iranian authorities every day.

Reuters reported before the U.S. strikes that Iran's oil exports have adapted to the war. Last week it was 2.2 million barrels a day. That's about $160 million a day, $1.2 billion a week (if you count at the Brent price, Iranian oil traded at a slight discount relative to Brent). And it confirms the assumption that war and oil trading go hand in hand.

What Wall Street expects from oil prices, read this piece..

Events in Iran do not appear to be determinative for global stock markets. 

I do not expect significant fluctuations. But there may be short-term price increases due to hype or damage to some important energy facility. War and trade are not mutually exclusive. So far, it does not appear that Iran's oil or gas infrastructure has been targeted by Israeli and US strikes. And since it is not under attack, it will continue to operate. Israel's energy sector may and will be under Iranian attack, but it will only have an effect inside Israel, and it is also likely to be short-term, because the factories can be fixed relatively quickly. Globally, Israel is not a significant player in the oil and gas market, so prices will not change as a result of the strike.

So far, no contamination has been detected, according to the IAEA. Even if the risk of contamination is realized, it is likely to be small and will not threaten large areas. I don't see this as a source of danger.

The military infrastructure is likely largely destroyed. Israel declared this week that Iranian air defenses have been knocked out and Israeli planes can fly relatively safely over Iran.