Oil prices Iran-Israel crisis unlikely to rival shock after invasion of Ukraine - for now

The escalating crisis between Israel and Iran has already triggered the largest single-day oil price surge in the past three years, and the question for many is how much higher the oil markets might climb.

- Jillian Ambrose Lisa O'Carroll

The price of Brent crude has jumped by about $10 a barrel since the start of June to a high of $78 a barrel on Friday, amid concerns that the conflict could wipe out Iran's oil exports or cut flows of crude from the wider Middle East region to the rest of the world.

For now, oil prices have cooled to about $72 a barrel and remain well below the peak of $115 a barrel following the invasion of Ukraine by Russia, one of the world's biggest oil and gas exporters.

Banks and market forecasters warn that the trajectory of oil prices will depend on how far the military and humanitarian crisis between Israel and Iran escalates.

Are global oil prices poised to increase further?

Oil prices could soar to $120 a barrel, according to analysts at Deutsche Bank, surpassing the highs reached in the wake of the Ukraine crisis. The German investment bank warned that if conflict were to engulf the wider region, shutting the Strait of Hormuz, then Middle Eastern oil could be blocked from the global market, leading to a price surge.

But this scenario is not the most likely. The bank believes that the oil market may have already accounted for a loss of some Iranian oil production, meaning that prices would probably remain steady at the current price of about $75 a barrel.