Critical energy infrastructure in Israel and Iran has not escaped unscathed from the first few days of the countries' escalated conflict. Worst-case scenarios have yet to be realized, but the war is already having a notable impact on energy production and exports in both countries.

That scenario now appears alarmingly close. On the evening of June 12th, Israel launched dozens of air strikes on Iranian military and nuclear sites. The attack threatens to inflame the Gulf, which pumps a third of the world’s oil. Brent crude, the global benchmark, rose by 8% on June 13th, to $74 a barrel (see chart). How high might it now go?

The initial round of Israeli attacks sent oil prices 7 percent higher on Friday. Still, at about $74 a barrel, Brent crude remains below the $80 average for 2024, the Deutsche Bank analysts wrote. The market continued to waver, though, and by Monday, oil prices had fallen about 3 percent.