Schroder Investment: Limited disruption risk to oil production related facilities in Iraq conflict without attack.

Schroder Investment's senior economist George Brown pointed out that currently, oil production facilities in Iran and the Middle East have not been affected. Although the potential scenario of Iran blocking the Strait of Hormuz, which would be catastrophic for the oil market, is often mentioned, the likelihood of it happening at this stage is very low. This action would affect other Middle Eastern countries that are trying to mediate conflicts, but its actual impact on Israel is limited. Israel may pressure Iran by attacking its oil infrastructure and disrupting its oil supply. However, Israel has always stated that its goal is to stop Iran's nuclear program, and so far its attacks have only targeted nuclear and military facilities, so the risk of disruption to oil production remains limited. Although oil prices are very sensitive to geopolitical conflicts, as in previous similar events, any initial increase in oil prices has significantly narrowed within a few hours. If Brent crude oil prices remain at around $75 per barrel, it is expected that the energy inflation rate in the G7 countries in the next year will be slightly higher than 5%, and the chances of triggering broader inflation pressures are not great.