Oil prices did not soar, to the surprise of market observers, after Iran’s unprecedented attack on Israel over the weekend and renewed geopolitical risks in the region.
At the end of last week, however, these prices had been galvanized by market expectations of an attack by Iran. But the Islamic Republic has sought to avoid escalation, experts say.
“Below the escalation threshold”
On the night of Saturday to Sunday, Iran launched a direct attack against Israel for the first time, in response to a strike against its consulate in Damascus on 1er April, attributed to the Israelis, which caused the death of seven members of the Revolutionary Guards.
Israel claimed to have “thwarted” this Iranian military operation, intercepting almost all of the missiles and drones.
“The damage inflicted was therefore limited,” summarizes Ole Hvalbye, analyst at Seb.
However, this is a significant change in strategy on the side of the Islamic Republic, which had refrained from attacking Israel head-on since its establishment in 1979.
“It now seems clear that the Iranian strike was a well-calibrated retaliatory action aimed at a maximum show of force but with a minimum probability of casualties,” says Jorge Leon of Rystad Energy.
This analyst sees a dual objective fulfilled by Iran: to ease the pressure within it with a view to a reaction, but also to “deter Israel” while remaining “just below the threshold of escalation”.
Continue exports
“Iran will also be careful not to aggravate the situation because it will want to continue its crude oil exports,” notes Tamas Varga, of PVM Energy, interviewed by AFP.
That country’s oil exports are subject to international sanctions, after former President Donald Trump in 2018 withdrew the United States from a multilateral nuclear deal with Tehran.
Despite this, Iran produced 3.25 million barrels per day in March, according to data from the International Energy Agency (IEA). It has increased “considerably its production compared to the levels of 1.9 million barrels per day in mid-2020”, underlines Ole Hvalbye.
The Islamic Republic has the world’s third-largest proven oil reserves, behind Venezuela and Saudi Arabia, according to the U.S. Energy Information Administration.
But Washington “will not hesitate to work with (its) allies” to strengthen sanctions against Iran, we can read in extracts made public ahead of a speech to be given by the American secretary on Tuesday. at Treasury Janet Yellen.
Enough to potentially cut off the market from a crude supply of between 500,000 and one million barrels per day, according to Seb Group estimates.
Reserve capacities
In the event of a more muscular response from Israel, Bjarne Schieldrop, a Seb analyst interviewed by AFP, recalls that the Organization of the Petroleum Exporting Countries and its allies (OPEC +), of which Iran is a member, has significant production capacity in reserve.
Between closing the crude taps across this organization and voluntary reductions in its extraction by certain member states, OPEC + has kept more than five million barrels per day underground since the end of 2022.
Saudi Arabia, for example, produced on average 9.6 million barrels per day in 2023, according to the IEA, while its oil production capacity can increase to 12 million barrels per day.
“Unless Saudi Arabia is drawn into the conflict or the Strait of Hormuz (a strategic crossing point for the global oil trade, editor’s note) is closed, OPEC’s spare capacity should be sufficient to mitigate the consequences of a possible supply disruption,” estimates Tamas Varga.
For the moment, according to the analyst, “the market believes that a new serious conflagration is avoidable”.