Oil war is back

Recently, Filipinos were grappling with torrential rains and floods brought about by Severe Tropical Storm Kristine. Then there are the Congressional and Senate hearings which have revealed threatening rants and serious allegations involving clandestine online gambling, illegal detentions, escapes, drugs, bribery, money laundering, sex and murder - all ingredients of typical K-dramas and telenovelas that have kept many Filipinos glued on the screen. Meanwhile, the Americans are preoccupied with the upcoming elections which are just a week from now.

- WILSON SY

While all these dramas are unfolding, the specter of an oil war has returned to haunt crude markets as Israel attacked Iran over the weekend. While Israel has targeted military facilities in Iran, many fear that Iran's oil and nuclear facilities may also be attacked. This may now force Iran to attack oil facilities in Saudi Arabia and the UAE, which are allies of the US, potentially disrupting supplies from the world's key export region.

Bitter enemies

Israel and Iran have been bitter foes since the 1979 Islamic Revolution. Their decades-long animosity has typically played out through proxy conflicts and covert operations, but recently, this hostility has marked a dangerous shift to direct confrontation. Israel has long considered Iran to be its greatest threat, citing Iranian leaders' calls for Israel's destruction, their support for militant groups like Hamas and Hezbollah and Iran's nuclear program.

Diminishing risk premium?

Prior to Israel's weekend attack on Iran, oil markets appeared increasingly desensitized to Middle East tensions. A pattern had emerged: price spikes following geopolitical events - the Israeli airstrike on Iran's consular building in Damascus, Iran's unprecedented direct missile attack on Israel, the killing of key figures in Hamas, Hezbollah and the IRGC - became progressively less sustained with each peak lower than the last.

Subdued oil prices