Analysts boldly predict: If Iranian oil facilities are destroyed, oil prices may soar by 160%!

SEB's Chief Commodity Analyst Bjarne Schieldrop told CNBC that if the situation in the Middle East escalates leading to a significant reduction in Iran's oil production, oil prices could soar to over $200 per barrel. Schieldrop pointed out that Iran exports over 2 million barrels of crude oil per day. If the escalating conflicts in the region destroy Iran's oil infrastructure, this will greatly reduce OPEC+'s spare oil production capacity. Schieldrop added that this not only means higher oil prices but also amplifies market uncertainty. "The next question is, what will happen in the Strait of Hormuz, which will certainly increase the risk premium for oil." An increase in the international benchmark Brent crude oil to $200 per barrel would mean a rise of about 160% from current prices. As of the time of writing, Brent crude oil was trading around $77.5 per barrel, up nearly 10% from the bottom on Tuesday. On Tuesday, Iran launched a significant missile attack on Israel in response to Israel's ground offensive in Lebanon. Traders are monitoring further escalation in the situation, especially Israel's potential retaliation. Despite the increase, Brent crude oil's trading price is still about 16% lower than its peak of $91 per barrel earlier this year. Other analysts seem to agree with Schieldrop, pointing out that geopolitical tensions will remain insignificant until investors see actual damage to oil infrastructure. Bob McNally, founder of Rapidan, told CNBC, "The market is complacent about geopolitical risks. If you don't see oil production stop, as we recently saw in Libya, the impact is irrelevant." He added, "I think they hope and expect that Israel's response may be restrained, and we won't see substantial interruptions in energy production and flow." Despite this, some investors are still betting on the possibility of damaged oil production. Brent crude oil call options with a strike price of $100 per barrel traded nearly 27 million barrels on Wednesday, indicating traders are hedging the risk of oil prices rising to three digits. The increasingly tense situation between Israel and Iran is not the only factor affecting oil prices. OPEC+ will decide in December whether to cancel some production cuts to release more oil supply. The alliance initially limited production to support oil prices but also lost market share in the process. Meanwhile, some member countries did not comply with production quotas, reportedly angering OPEC leader Saudi Arabia. The Wall Street Journal cited an OPEC+ representative as saying that Saudi Arabia warned that if member countries ignore production limits, oil prices will fall to $50 per barrel. Some see this as a veiled threat that Saudi Arabia may launch a price war. However, OPEC later stated that the report was "completely inaccurate and misleading."