The areas under threat amid escalating Middle East tensions

Many rumours are circulating about how Israel could respond to Iran’s missile attack earlier last week by targeting Iran’s infrastructure.

We have discussed in recent days how Israel is unlikely to target Iranian energy infrastructure yet, but the Ababan refinery seems a possible target if it were to do so. Targeting a refinery would hurt Iran in several ways - not only reducing gasoline supply to its domestic market but also freeing up crude supply. Given sanctions, Iran already struggles to find buyers for its crude, with the vast majority heading to China; hence, if Abadan were to be taken out of commission, Iran would only have China as a plausible buyer of this excess crude. This would, in turn, have a downward influence on oil prices if anything, as China would reduce its crude purchases from other sources to buy Iran’s likely heavily discounted barrels.