Crude oil prices could soar above $100 a barrel if Iran continues to launch airstrikes against Israel, raising fears of a regional war.
Iran is a vast producer of oil resources and is the third largest producer in the OPEC oil cartel.
Any disruption to its capacity in global market supply could cause oil prices to rise higher.
For now, the market will closely monitor developments in the Strait of Hormuz, which lies between Oman and Iran. It is the location of the main crude oil mining area which is the source of global supply every day.
Any attack on oil production or export facilities in Iran would push the price of Brent crude to $100 and the closure of the Strait of Hormuz would lead to prices in the range of $120 to $130 per barrel.
Earlier, Iran sent more than 300 drones and missiles over Israel as the first warning that they dare to go to war with the Jewish state. However, most of his attacks were intercepted by the Israeli defense.
Meanwhile, oil prices are currently trading slightly lower in early trading in Asia with Brent crude oil down 0.31% to $90.17 per barrel and WTI down 0.44% to trade at $85.28 per barrel.
Global crude oil is also set to face a major natural decline in production. The decline rate for conventional oil wells is around 15% without any capital expenditure.
In addition, oil prices have risen in recent months due to trade disruptions and delays caused by the Red Sea maritime attacks from the Houthis in their solidarity with the Palestinians.
