Oil in the line of fire; Asian refineries will be grounded if Iran’s exports are cut off

Oil prices were volatile on Monday, after rising 7 percent on Friday, as Iran and Israel escalated their counterattacks over the weekend, raising concerns about the potential for a regional conflict and disruptions to Middle East oil exports.
Iran’s missile attacks on Tel Aviv and Haifa, and the Israeli strikes, have raised concerns among world leaders, particularly at the G7 summit, about the potential for a conflict and disruptions to oil supplies through the Strait of Hormuz, which carries about 18 to 19 million barrels a day (about 20 percent of global oil consumption).
Experts say the surge in buying is due to the lack of prospects for a diplomatic solution to the crisis, but some selling also suggests an emotional reaction.
Markets expect oil prices to rise significantly if Iran’s energy facilities are attacked or the Strait of Hormuz is closed.
Iran, a member of OPEC, produces about 3.3 million barrels of oil per day and exports more than 2 million barrels. The production reserves of OPEC and allies, including Russia, are roughly equivalent to Iran’s production capacity, which could compensate for any outage.