How regime change in Iran could affect global oil prices

Senior Israeli officials said that this week, military campaigns against Iran can trigger the decline of the regime, an incident that will have tremendous effects for the global oil market.

Since Israel bombed the third largest raw manufacturer in OPEC for eight straight days, the oil market reacted with a remarkable restriction, and without a clear sign that the conflict would end soon.

Since Israel started an attack on Iran a week ago, oil prices have increased by 10%, but so far, both US crude oil and global comparison have been below $ 80 per barrel.

Rising risk

Nevertheless, according to energy analysts, the risk of a supply deduction that triggers a major increase in prices increases as the conflict increases.

President Donald Trump threatened the life of Iran’s high leader Ayatullah Ali Khanei’s life and is intending to help Israel’s destroying the nuclear program of the Islamic Republic. Analysts, Iran’s leadership is more likely to target regional oil facilities.

Scott Model, CEO of Rapidan Energy Group, a consulting firm, said Israel’s primary goal is to humiliate Iran’s nuclear program. However, Jerusalem seems to have a secondary target to damage Iran’s security institution.

“They do not call it a regime change, they call it the change of regime.” He said.

Denying official

Prime Minister Benjamin Netanyahu rejected that the regime change was Israel’s official target, he said on Thursday that an internal governance of an internal governor was an internal Iranian decision. However, the Prime Minister thought that Khanenei’s regime could fall as a result of the conflict.

Defense Minister Israel Katz ordered the Israeli army to intensify the strikes to Iran with the aim of “stabilizing the regime” by attacking Israel’s army on Friday. It was reported that he tried to kill Khanei on the opening days of Israel’s campaignBut Trump vetoed the plan.

Model said there was no sign that the regime in Iran was on the verge of collapse.

However, Natasha Kaneva, President of the Global Commodity Survey in JPMorgan, said this week as a note to customers, “more political instability in Iran” can lead to significant higher oil prices for long periods of time, “he said.

According to JPMorgan, since 1979, there are eight cases of change in regime in countries that produce large oil. According to the bank, oil prices increased by 76% after these changes to balance at a price of approximately 30% higher than pre -crisis levels.

For example, according to JPMorgan, the Iranian Revolution took the Shah from the midst of 1979 to mid -1980, after the Shah took off the Shah to power. This triggered an economic stagnation around the world.

More recently, according to JPMorgan, the revolution in Libya, which laid Muammar Gaddafi from $ 93 per barrel in January 2011 at $ 93 per barrel in January 2011, shook oil prices until April that year. According to the bank, this price increase coincided with the European debt crisis and caused almost a global recession.

Bigger than Libya

Model, the regime change in Iran will have a much greater impact on the global oil market than the 2011 revolution in Libya.

Model, “We need to see some powerful indicators that the state has come to stop, the regime change is really before starting to pricing in three million barrels a day, the market began to look real,” he said. He said.

If he believes that the regime in Iran is facing an existential crisis, the Global Commodity Strategy President at RBC Capital Markets may use a short range of range to target the energy facilities in the region and the oil tankers in the Gulf of Basra.

Tehran may also try to remove the Hormuz Strait, the narrow water mass between Iran and Oman.

“We receive reports that Iran is very aggressively squeezing the ship in a very aggressive way,” CNBC said on Wednesday. He said. Croft, Qatarenergy and the Greek Ministry of transport have already warned their ships to avoid the Bosphorus as much as possible.

“Although there are no missiles flying in the straits, they are not calm waters,” he said.

Even larger than ratios

Rapidan has a 70% chance of participating in Israeli air strikes against Iran’s nuclear facilities. Model, Iran’s Lock Uranium Enrichment facility in Fordow will probably buy $ 4 to $ 4, the oil prices, he said. He said he would probably respond to Iran in a limited way to ensure the survival of the regime.

However, according to Rapidan, there is a risk of disrupting energy resources by retaliation against the infrastructure in the Gulf or ships in the Hormuz Strait. According to the company, Iran can be more than $ 100 per barrel if Iran is completely acting to disrupt the transportation in the Strait.

“According to our opinion, they can send the market after a long time than the market thinks,” the founder and former energy advisor of President George W. Bush said.

McNally may be interrupted for weeks or months. United States Fifth FleetBahrain -based, he would solve the situation in hours or days.

“This wouldn’t be a Cakewalk,” he said.