Oil prices in focus amid Israel-Iran conflict: Here's what you need to know

Market Overview & Geopolitical Impact - Oil prices initially surged by 8%, a significant single-day move, reaching approximately $80 per barrel [1] - The market's focus shifted to why oil prices didn't increase even more, despite an initial 14% rise [2] - Concerns exist regarding potential Israeli strikes on Iranian oil infrastructure, specifically Karg Island, which could trigger a $20 super spike in oil prices [3] - Iran exports 1500000 barrels (1.5 million barrels) of oil per day, with approximately 90% of these exports originating from Kharg Island [4] Supply Dynamics - The global oil market is currently well-supplied, according to City Group [3] - Saudi Arabia has the capacity to increase oil production to offset potential disruptions in Iranian supply [7] - If 1500000 Iranian barrels (1.5 million barrels) are removed from the market, Saudi Arabia could compensate, though perhaps not entirely [7] Geopolitical Considerations - Open Arab dialogue exists between Iran and Saudi Arabia, both of which are OPEC members [8] - The potential for Saudi Arabia to increase production to compensate for Iranian supply disruptions raises questions about cooperation and potential Iranian reactions [8]