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Mostafa Alkharouf/Anadolu via Getty Images
- Iran executed a significant ballistic missile assault on Israel on Tuesday.
- Israel has pledged to respond, potentially targeting Iran’s oil infrastructure.
- This escalation could further elevate oil prices, complicating matters for Harris’ campaign.
In response to Iran’s substantial ballistic missile strike earlier this week, Israel has committed to retaliation, with Iranian oil production sites possibly in its crosshairs.
This action could lead to an increase in oil prices, which are already rising due to the attack and expectations of Israeli countermeasures. Such developments might pose challenges for Vice President Kamala Harris as she approaches a crucial election period.
Historically, presidents facing surging gas prices tend not to perform well politically. Research indicates that rising gasoline costs correlate with declining presidential approval ratings. Incumbents or their parties often struggle when public sentiment turns negative; Americans frequently hold the president accountable for increased fuel expenses—even when external factors drive these price hikes.
Experts suggest that currently all parties involved have reasons to avoid actions that might further destabilize the region. Patrick De Haan, head of petroleum analysis at GasBuddy, remarked on the relative stability amidst global tensions: “It’s not comparable to Russia’s invasion of Ukraine.”
“The Middle East is crucial,” he added. “However, both sides face considerable pressure not to escalate into full-blown conflict. It would be quite extraordinary if things spiraled out of control.”
De Haan noted how markets reacted after Iran’s previous attacks in April—prices spiked briefly before stabilizing again. The primary concern now is that Israeli leaders appear inclined toward a more robust response than what was seen previously this year.
“In April, Israel conducted a very limited strike against one air defense battery in central Iran as a warning,” explained Clay Seigle, a political risk strategist. “This demonstrated Israel’s capability to target Iranian assets from afar if necessary.” In contrast, during July’s operations, Israel targeted an oil terminal controlled by Houthi rebels backed by Iran in Yemen—a move signaling intent regarding Iranian assets.
Seigle emphasized that recent Israeli strikes on Houthi-controlled energy facilities reiterate their focus on disrupting Iranian interests directly related to oil production and exportation capabilities.
ATTA KENARE/AFP via Getty Images
An assault targeting Iranian refineries or escalating unrest could disrupt shipping routes through the Strait of Hormuz—a vital passageway for global trade and energy supplies.
The market has shown resilience against past geopolitical events; Kit Haines from Energy Aspects noted concerns about supply disruptions following sanctions post-Russia’s invasion of Ukraine did not materialize as feared after incidents like the 2019 drone attack on Saudi Arabia’s Abqaiq facility.
However, he cautioned that current anxieties revolve around broader regional instability rather than just direct responses from Israel: ”There is genuine concern now about potential impacts on supply chains.”
Israel Promises Retaliation Following Massive Missile Attack from Iran
This week saw over 180 ballistic missiles launched by Iran towards Israel—the largest such offensive recorded—triggered by recent escalations including targeted killings attributed to Israeli forces involving Hezbollah leader Hassan Nasrallah and Hamas leader Ismail Haniyeh.
The targets were primarily military installations within densely populated areas across central Israel.
With assistance from U.S forces stationed nearby,Israel reported successfully intercepting most incoming missiles while U.S officials described it as “defeated and ineffective.” However satellite imagery confirmed some missiles struck military targets within Israeli territory.
Israeli Prime Minister Benjamin Netanyahu vowed retaliation with backing from Washington:
“The regime in Tehran fails to grasp our resolve regarding self-defense,” Netanyahu stated emphatically while asserting his commitment: “We will adhere strictly to our principle: Any act of aggression will be met with force.”
wisam Hashlamoun/Anadolu via Getty Images
The discourse surrounding possible retaliatory targets has shifted focus away from nuclear sites toward vast Iranian Oil Production Facilities;Iran stands among leading producers globally possessing significant reserves alongside robust extraction capabilities.
Following Tuesday’s incident alone led crude prices upward amid fears concerning future entanglements involving U.S forces should hostilities escalate further beyond current levels.”
Seigle elaborated stating market fluctuations arise during periods marked either actual shortages or anticipated ones whereby traders reassess values based upon scarcity relative demand dynamics noting two key factors influencing disruption include duration & extent affecting output levels overall.”
If strikes were directed specifically towards refining operations providing essential fuels domestically along with export channels then consequences would likely manifest differently depending upon scale involved.
Should even minor refinery damage occur resulting shortages locally without impacting international supplies significantly whereas targeting major production/export hubs would yield far-reaching implications causing worldwide price surges accordingly.
“Recent trends indicate markets began factoring these risks into pricing models reflecting increases exceeding five percent recently,” Seigle concluded.
U.S President Joe Biden weighed-in discussing potential ramifications surrounding any proposed actions taken by Israelis indicating reluctance supporting attacks aimed solely focused upon nuclear-related infrastructures but later suggested deliberations ongoing whether support extends toward striking designated petroleum sectors instead.
Shortly thereafter crude values surged upwards five percent prompting National Iranian Tanker Company relocating vessels away Kharg Island fearing imminent assaults according reports tracked independently online services monitoring crude movements closely.
On Friday Biden appeared somewhat contradictory suggesting alternative strategies should he find himself occupying similar positions held presently advocating caution moving forward emphasizing need careful consideration prior engaging hostile measures.”
Ahead Of Elections Gas Prices Remain A Critical Focus Point For Voters!
JIM WATSON / AFP via Getty Images
If indeed targeted efforts commence against Iranians’ energy sector then repercussions felt throughout electoral landscape come November!
Prior leading up until latest missile barrage global rates had been trending downward reaching lowest points observed nearly three years ago coupled historic highs achieved domestically throughout same timeframe.
Yet sudden spikes occurring amidst foreign conflicts combined domestic inflationary pressures present challenges reminiscent historical patterns witnessed previously! Nevertheless shifts occurring today reflect changing political climates reducing likelihood drastic swings affecting presidential approval ratings compared past eras!
As per latest data released Friday national averages stood approximately $3.17 per gallon according GasBuddy reflecting declines month-over-month/year-over-year basis respectively! Predicting future trajectories remains complex given volatility inherent within marketplace dynamics however DeHaan expressed skepticism anticipating uncontrolled surges forthcoming anytime soon!
“I believe several factors exist maintaining equilibrium amongst pricing structures yet simultaneous escalations transpiring abroad coupled unforeseen domestic crises could trigger unexpected outcomes ahead Election Day,” he stated cautiously adding odds favoring major upheavals remain relatively low overall!”
