New Delhi, June 16 (IANS) Oil prices in the international market jumped further on Monday after the Mideast tensions escalated between Israel and Iran.

Brent climbed as much as 5.5 per cent before paring most gains to trade around $75 a barrel.

Israel launched an attack on the giant South Pars gas field, forcing the halt of a production platform, according to reports.

According to analysts, they do not expect to see another significant leg higher in crude prices unless there are attempts to close the Strait of Hormuz or Iran-backed Houthis in Yemen target shipping.

Norbert Rucker, Head Economics and Next Generation Research, Julius Baer, said oil is the fever measure of such conflicts, and prices spiked accordingly.

“The situation remains in flux, and the coming days and weeks will show how far the escalation goes. Our best guess is that this latest conflict eruption follows the usual pattern, with prices rising temporarily before returning to previous levels. The oil market is very resilient today and supplies are unlikely at risk,” he mentioned.

“Our best guess is that oil prices will follow the usual pattern around such geopolitical events, with prices rising temporarily before returning towards previous levels. The peak and duration of this pattern depends on the intensity of the conflict, but historically averaged below 20 per cent in price gains and a length of up to three months,” according to Rucker.

The Israeli action comes in the backdrop of talks on a nuclear deal between the US and Iran having soured and Tehran stating that if it is attacked it would retaliate against US bases in Iraq and adjoining countries. The US has asked some of its personnel there to exit.

According to a report by Emkay Global, Iran produces around 3.3 million barrels per day (mbpd) of crude oil (3 per cent of global production) and exports around 1.5 mbpd, with China being the main importer (80 per cent), followed by Turkey.

Iran is also on the northern side of the Strait of Hormuz/Persian Gulf through which 20 mbpd+ of oil trade flows, with Saudi Arabia and the UAE etc also shipping, and in the past it has warned of blocking the same.

Hence a wider Middle East conflict with impact on Saudi, Iraq, Kuwait and UAE oil supplies can lead to a sharp spike in oil prices.

—IANS

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