Oil markets (CL=F, BZ=F) are on edge as Middle East tensions escalate following Iran's airstrike on Israel Tuesday. Rystad Energy Chief Economist Claudio Galimberti joins Morning Brief to analyze the potential impact on oil prices.

Galimberti says oil surpassing the $80 threshold is "a distinct possibility" amid rising regional tensions. He explains that oil prices are also influenced by the significant spare production capacity in the Middle East. Following an extended period of production cuts, the region now maintains substantial output levels. Any war-related disruption to this production could cause oil prices to surge dramatically.

The likelihood of direct conflict between Iran and Israel is "quite likely," according to Galimberti, and markets are beginning to factor this risk into prices, anticipating "a big supply disruption" in oil markets.

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This post was written by Angel Smith