The recent escalation of tensions between Iran and Israel has caused a significant surge in global oil prices, with Brent crude trading above $75 a barrel. The conflict intensified when Iran fired over 180 missiles into Israel, prompting threats of retaliation from Israeli Prime Minister Benjamin Netanyahu, further increasing the risk of a tit-for-tat escalation in a region responsible for a third of the world’s oil supply.

The potential involvement of the United States in the conflict, along with the impact on oil prices, remains a key concern for investors. Disruption in Iranian oil supplies could lead to an increase in prices and inflation rates in advanced economies. Analysts also warn of the risk of an attack on Iranian oil facilities or the blocking of the strategic Strait of Hormuz, which handles nearly 30% of global oil trade.

Meanwhile, sanctions on Iran’s oil industry have impacted the country’s economy, leading to a depreciation of the rial and inflation. The country’s reliance on oil exports and ongoing economic challenges highlight the significant economic strain a war with Israel would pose for Iran, potentially fueling further public discontent.

Despite these challenges, Iran continues to sell oil abroad, particularly to China, utilizing methods such as a “dark fleet” to circumvent sanctions. The Iranian regime’s control over the economy, coupled with corruption and nepotism, further exacerbates the economic challenges faced by the Iranian population.