The Israel-Iran Conflict: A Detailed Overview of Situation

Course of the Conflict and Military Actions

• On Friday, Israel carried out a series of massive airstrikes on Iranian military and nuclear targets, including installations in Natanz, Isfahan, and missile bases in Kermanshah and Tabriz.
• According to Israeli sources, over 400 targets were attacked within 24 hours, killing more than 20 high-ranking Iranian commanders and 9 scientists linked to the nuclear program. The death toll has already exceeded 400, with approximately half being military and scientific personnel, while over 1,200 people were injured.
• Iran responded with several waves of missile and drone attacks on Israel, which resulted in the deaths of over 20 people. The number of injured is already over 500. Some of the projectiles were intercepted by Israeli and American air defense systems.
• As a result of the Israeli airstrikes, the above-ground elements of the Natanz nuclear complex were severely damaged, as was Iran's energy and military infrastructure. However, no damage to the underground uranium enrichment halls was reported. Nevertheless, these units cannot operate fully without access to electricity.
• The Israeli attack also targeted the South Pars gas field, which is strategic for both Iran and Qatar. There are also indications of further attacks targeting fuel depots.
• Israel is reported to control the airspace in western Iran, where most of the air defense infrastructure was destroyed. The Associated Press indicates that Israel can now conduct airstrikes in Tehran with little difficulty.

Key figures from the Iranian command were killed in Friday's attacks. Source: Bloomberg Finance LP

International Reactions and US Actions

• The US officially did not participate in the Israeli airstrikes but actively supported Israel in air defense, intercepting some Iranian missiles.
• The American administration called on both sides for de-escalation and warned Iran against attacking American bases or personnel in the region.
• Trump is pressuring Iran to return to nuclear talks and accept conditions for reducing its involvement in atomic development. Trump also reportedly advised Israel not to attempt to directly attack Iran's supreme leader.
• US-Iran nuclear talks scheduled for the weekend in Oman were deemed "pointless" by Tehran after the Israeli attacks. The talks did not take place.
• Russia offered mediation and de-escalation assistance, while other countries (UK, Saudi Arabia, Egypt) called for restraint to prevent further escalation.

Oil Market Situation and Possible Scenarios

• After Friday's attacks, oil prices (WTI, Brent) rose by 6-7% to levels of $72-74 per barrel. WTI crude opened Monday's session above $75, but the entire price gap is currently being neutralized, and the price has fallen below $71.
• ING estimates that further escalation of the conflict could push prices above $80, and in the event of disruptions in the Strait of Hormuz, even to $120-130 per barrel, which would be a shock to the global economy.
• Iran produces approximately 3.3 million barrels per day, exporting around 1.7 million bpd. A complete shutdown of Iranian exports could cause a sharp price increase. However, historically, the impact of conflicts in the region on oil prices has been short-lived (5-10 days) if there were no lasting supply disruptions.
• The market remains very sensitive to further escalation or the involvement of third parties. The key will be whether Iran decides to blockade the Strait of Hormuz, through which 20% of the world's oil supply flows. Such an action would be logistically difficult and unfavorable for other OPEC states, but even a short-term blockade could cause sharp price spikes and long-term market disruptions.

Further Prospects

• The Israel-Iran conflict has escalated to a scale unprecedented in decades, with direct attacks on nuclear and energy infrastructure and heavy casualties among Iran's military command. Israel is also suffering its greatest losses since 2023, when Hamas launched its attack on Israel.
• Both sides signal readiness for further actions but are simultaneously trying to avoid drawing the US into open war. Iran is attempting to balance the need for retaliation with avoiding catastrophic escalation.
• Although Israel initially announced that military actions against Iran were expected to conclude within a few days, the New York Times indicates that this situation could drag on for weeks.
• The oil market is reacting nervously, but without a lasting supply shock, price increases may be temporary. The greatest risks remain a blockade of the Strait of Hormuz or the destruction of Iran's export infrastructure.
• It is indicated that Iran has made enormous progress in uranium enrichment and, within months, could produce several or a dozen nuclear warheads.

The behavior of oil prices aligns with previous geopolitical events related to the oil market. In the past, the initial wave of increases typically subsided after 5-10 days. Source: Bloomberg Finance LP, XTB