Oil prices surge to $110, major escalation in Iran conflict, analysts warn it may continue until May!

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Israel's airstrike on Iran's South Pars gas field has completely shattered the established boundaries of the regional situation, and the intensity and duration of this Middle East conflict have exceeded market expectations.

After Israel launched an unprecedented attack on the South Pars gas field facilities, oil prices immediately soared, with international benchmark Brent crude oil prices hovering around $108 per barrel on Thursday. Torbjorn Soltvedt, Chief Analyst for the Middle East at risk intelligence firm Verisk Maplecroft, clearly stated in a research report Wednesday: This attack "reinforces our judgment that the conflict is most likely to continue into May, and there is currently no obvious path to de-escalation."

The situation has further complicated: According to Xinhua News Agency, Iran's Islamic Revolutionary Guard Corps issued a statement on the 19th saying it had launched the "True Promise-4" campaign, wave 63, and "burned" US-related oil facilities as retaliation. The statement claimed that the war between Iran, the US, and Israel has entered a "new phase." Saudi Arabia's foreign minister issued a stern warning, stating that it reserved the right "to take military action if necessary." At the same time, Iran continues to blockade the Strait of Hormuz, which has suddenly increased supply-side pressure due to the blockage of a significant proportion of the global oil supply channel.

Late Wednesday, Trump posted on Truth Social, saying Israel's military would not attack the South Pars gas field again, "unless Iran unwisely decides to attack Qatar." This statement implies the US had prior knowledge and approval of the attack; according to Axios reporter Barak Ravid, the operation was carried out under coordination and approval by the Trump administration.

Conflict Escalation: Iran's Counterattack Impacts Multiple Countries' Energy Facilities

Iran's retaliation covers a wide range. Daniel Schneiderman, Director of the Washington Global Policy Project at the University of Pennsylvania, told Axios that Tehran's targets include “the crown jewel of Qatar”—the Ras Laffan Industrial City, the world's largest liquefied natural gas (LNG) export facility. Additionally, energy facilities in Saudi Arabia and the United Arab Emirates have also been attacked.

After the first wave of Iran's missile attacks, Qatari officials immediately contacted US officials, including White House envoy Steve Witkoff. The Saudi foreign minister spoke tough, issuing a warning that the country reserves the right to military action. The White House and Pentagon have yet to comment on the matter.

The Hormuz Predicament: Iran's Highly Mobile Combat Capabilities Not to Be Underestimated

Although joint US-Israeli military operations have significantly weakened Iran's ballistic missile and drone launch capabilities, analysts warn against being overly optimistic. Schneiderman pointed out that this is one reason oil prices have not further surged.

However, Schneiderman also issued a key warning—this former Biden administration official for the Defense Department and State Department said, "Shahed launchers are highly mobile and difficult to strike accurately. I believe Israel and the US will continue to pursue the destruction of individual launchers and ammunition depots for quite some time." He added that Iran deploys some missiles on trucks with mobile launchers, making it similarly difficult to eliminate them precisely; "the flexibility of movable launch platforms is not hard to achieve operationally."

Schneiderman concluded: "The difficulty for Iran to conduct these actions has increased compared to the early stages of the war, but they still have the capability to exert significant pressure on the Strait of Hormuz."

Risk Spread: Saudi Arabia and Red Sea Corridor the Greatest Vulnerabilities

Analysts currently worry most about the conflict spreading to critical facilities that have so far remained undamaged. Soltvedt warned in his research report that Israel's strike on South Pars "may trigger attacks on facilities that have not yet been affected."

He specifically pointed out the "greatest vulnerability" is if Saudi Arabia's east-west oil pipelines or Red Sea export facilities are attacked—these together with the UAE's Fujairah port form the only several important alternative oil transport corridors outside the Strait of Hormuz. If these facilities are damaged, the global energy market will face an even more severe supply shock than it does now.

Many analysts have a cautious attitude toward the possibility of de-escalation. Soltvedt stated explicitly: In the absence of any clear way to de-escalate, the likelihood of the conflict extending into May is highest. Schneiderman admitted, "It's difficult to predict when de-escalation will occur," but for now, "Iran has no motivation to de-escalate."

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