Israel is listening to U.S. concerns about a possible retaliatory strike on Iran’s energy infrastructure, but it will make its own decision on how to avenge the Iranian missile attack, the office of the Israeli prime minister has said.
The world and the oil market are awaiting Israel’s response to the Iranian missile attack on Israel on October 1. Targeting Iranian oil infrastructure hasn’t been ruled out, which has kept the region and the market on edge over the potential spillover of the conflict to the wider Middle East.
“We listen to the opinions of the United States, but we will make our final decisions based on our national interests,” a statement from Benjamin Netanyahu’s office said on Tuesday, as carried by Bloomberg.
The statement was issued after the Washington Post reported that Netanyahu had told the U.S. Administration that Israel would rather go for military targets in Iran, rather than oil and nuclear facilities.
Netanyahu and President Joe Biden spoke last week, the Washington Post reported on Monday, citing two officials with knowledge of the matter.
Israel’s retaliatory action would be calibrated to avoid the perception of “political interference in the U.S. elections,” one of the officials told the Post.
Market speculation has been ripe over the past two weeks, with analysts weighing the possibility of Israel striking Iranian oil facilities and thus provoking a counter-strike from Iran, either in the form of Iranian proxies targeting oil infrastructure in other Middle Eastern producers or attempting to block the Strait of Hormuz.
Most analysts say that the OPEC spare capacity, concentrated in Saudi Arabia and the UAE, would be enough to compensate for an Iranian loss of supply.
An even more significant disruption to supply from the Middle East could lead to triple-digit oil prices. But analysts currently believe attacks on oil infrastructure in other producers in the region or the closure of the Strait of Hormuz are low-probability events.
The most recent comments from Israel that it’s “listening” to the U.S. position have eased concerns about a loss of oil supply from Iran and the wider Middle Eastern region, and oil prices tanked 4% early on Tuesday in Asian trade.
By Tsvetana Paraskova for Oilprice.com
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