In years of conflict and alarms, the oil market seems to have developed an &#34;immune response&#34; to the fires of war in the Middle East. Whether it is missile attacks or diplomatic tensions, supply has remained stable, and price fluctuations have been brief.
However, this long-tested calm is now facing a real test. With Israel launching a new round of strikes against Iran and Iran's possible response still uncertain, the entire market is stepping into a weekend filled with uncertainty. Traders are no longer calm, risk aversion is rising, oil prices are fluctuating sharply, and the market is beginning to seriously consider: this time, will it be different?
<h2>Attacks Have Shaken Market Confidence, No One Dares to Short Oil Prices</h2>
Although news headlines frequently mention the tense situation, evoking memories of the political turmoil and soaring oil prices of the 1970s, even when oil prices soared, they often quickly fell back. In April and October of last year, Iran and Israel exchanged missile fire, but oil from the Middle East continued to flow smoothly to global markets without being affected.
Now, Israel's latest attacks are testing this &#34;calm&#34; among oil market traders. According to CCTV News, on the early morning of the 13th local time, Israel launched an attack on Iran. Subsequently, Iran began to retaliate. Global Times cited media reports that the Israeli city of Tel Aviv was attacked, including 10 nuclear facilities. The Israel Defense Forces stated that Iran launched over 100 drones at Israel.
So far, oil supply has not been affected, but this attack has shaken market confidence. For most of this year, the oil market has been worried about oversupply leading to price declines, OPEC+ quickly canceled production cuts, and production in places like Brazil and Guyana continued to increase, while U.S. President Trump's trade war also threatened oil demand.
Although many still believe that the oil market will ultimately not be significantly impacted, the enormous uncertainty, including whether Iran will retaliate strongly, whether Israel will attack further, and how the U.S. will respond, forces traders to price in various possibilities.
As the weekly trading comes to an end, few dare to take the risk of &#34;shorting&#34; over the weekend. Brent crude futures surged 13% earlier on Friday, closing with a gain of 7%, at about $74 per barrel.
Andreas Laskaratos, CEO of energy trading company AB Commodities, said,
<blockquote>
&#34;When war breaks out, no one wants to short any asset over the weekend. Although the supply and demand fundamentals have not changed, you can't go against the news over the weekend.&#34;
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<h2>Goldman Sachs: In the Worst Case, Oil Prices Could Exceed $100</h2>
After Israel's first attack on Iran early Friday morning, traders and analysts immediately began to simulate various possibilities of escalation or de-escalation.
Analysts at Goldman Sachs raised their oil price forecasts for the coming months by $2 to $3 per barrel, but also outlined a range of scenarios: in the worst case, oil prices could soar above $100 per barrel, while the most pessimistic scenario sees prices falling below $50 next year. However, they still maintain their forecast of oil prices falling below $60 in the fourth quarter.
Goldman Sachs analysts wrote:
<blockquote>
&#34;The situation in the Middle East may escalate, which means the short-term risks to our current oil price forecast are skewed to the upside.&#34;
The trading market also shows concerns about the price surge. A large number of &#34;out-of-the-money call options&#34; have been traded, indicating that many people are hedging against the risk of a sudden price increase. The options with the largest trading volume are contracts that would profit if oil prices rise above $85 per barrel before June 25. The price ratio between WTI crude oil call options and put options has risen to the highest level since March 2022, when the Russia-Ukraine war broke out.
</blockquote>
<h2>Disruption in the Strait of Hormuz? Analysts: Unlikely</h2>
The most concerning issue for the oil market is the potential disruption in the Strait of Hormuz. About one-fifth of the world's oil supply passes through this chokepoint. Most analysts believe that such a scenario is unlikely to occur.
Helima Croft, head of global commodity strategy at RBC Capital Markets and former CIA analyst, stated,
<blockquote>
&#34;As we understand it, given that the U.S. Fifth Fleet is stationed in Bahrain, it would be difficult for Iran to close the Strait of Hormuz for an extended period.&#34;
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Analysts believe that although the probability is low, any increase in the likelihood of disruption could drive oil prices higher. Consulting firm FGE NexantECA wrote in a report:
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&#34;A closure of the Strait of Hormuz would be a very severe 'binary event,' making market balance predictions very difficult. Most market participants we interviewed do not believe the Strait of Hormuz will be closed—the consequences are too severe.&#34;
</blockquote>
Oil market traders are also concerned about other potential scenarios, such as Israel possibly attacking Iran's oil infrastructure (although this has not yet occurred), or if Iran accelerates its nuclear program, the U.S. may further intensify sanctions against Iran.
<h2>Traders Still View Through Past Experiences</h2>
However, most traders are currently viewing this event through the lens of past experiences over the past few years. Dan Pickering, chief investment officer at energy investment bank Pickering Energy Partners, wrote on the X platform:
<blockquote>
&#34;In the past decade, similar events have typically been opportunities for 'selling the rally.' They ultimately did not escalate, and concerns often turned out to be worse than the actual consequences.&#34;
</blockquote>
Some analysts even suggest that this attack could be bearish for oil prices. Trump called on Iran on Friday to reach an agreement, or face &#34;more severe&#34; attacks. If Iran accepts the suggestion to reach a nuclear agreement, it could lead to a relaxation of sanctions, thereby boosting Iranian exports. FGE NexantECA noted that some market participants have viewed the recent oil price fluctuations as a &#34;selling&#34; opportunity.
<blockquote>
&#34;However, they also acknowledge that it is difficult to short the market now, as the likelihood of escalation in the coming weeks remains high.&#34;
</blockquote>
Even if a disruption occurs, OPEC+ member countries like Saudi Arabia and the UAE have significant spare capacity that can alleviate rising oil prices to some extent. Analysts at AB Commodities stated:
<blockquote>
&#34;It indeed takes a lot of courage to short the oil market right now. But we also do not believe that the current upward trend can be sustained in the long term; as of now, the market's supply and demand fundamentals have not changed.&#34;
</blockquote>

Israel's airstrike on Iran has triggered a geopolitical escalation, breaking the oil market's years of numbness to conflict. Although the supply and demand fundamentals remain unchanged, traders are beginning to reassess risks, with Brent crude prices soaring by 13% at one point. Goldman Sachs predicts that in the worst-case scenario, oil prices could spike to over $100 per barrel. Market vigilance has finally returned, and in the face of uncertainty in the Middle East, no one dares to take the risk of shorting oil prices before the weekend. However, most traders still view this event through the lens of past experiences, and some analysts believe that this attack could be bearish for oil prices, suggesting that if Iran shows weakness and reaches a nuclear agreement, it may lead to a relaxation of sanctions, thereby boosting Iranian exports

- The oil market has shown resilience amid ongoing Middle Eastern conflicts, but recent Israeli strikes on Iran have heightened uncertainty.  
- Traders are now cautious, with oil prices experiencing significant fluctuations, and Goldman Sachs predicts potential price increases, with worst-case scenarios exceeding $100 per barrel.  
- Despite concerns over supply disruptions, analysts believe that significant interruptions in the Strait of Hormuz are unlikely, and many traders are relying on past experiences to navigate the current volatility.

The Israel-Hamas conflict has broken the traders' numbness, and market vigilance has finally returned; no one dares to short oil prices