Middle East Tensions: OPEC’s Balancing Act Amidst Israeli-Iranian Conflict
OPEC can offset a complete loss of Iranian oil supply if Iranian facilities are hit by Israel. However, a potential retaliation by Iran could endanger Gulf neighbors' oil installations. The geopolitical standoff puts the spotlight on OPEC's spare capacity and highlights vulnerabilities in the region.
OPEC's ability to compensate for the loss of Iranian oil supply has become crucial amid escalating tensions between Israel and Iran. Israeli forces launched airstrikes, prompting a missile barrage from Iran, which both sides have vowed to escalate if provoked further.
Despite Tehran's oil output constituting about 3.2 million barrels per day—around 3% of global production—analysts believe OPEC+ can cover the shortfall due to its available spare capacity. However, if Iran retaliates against Gulf states' installations, the Middle East's oil infrastructure remains in jeopardy.
The ongoing conflict raises concerns globally, with potential impacts on oil prices and political events, including U.S. presidential elections. Market experts suggest a diversified supply, primarily from the U.S., provides some cushion against severe disruptions.
(With inputs from agencies.)
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- conflict
- spare capacity
- geopolitical
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- supply
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