The probability of an Israeli/US attack on Iran by end 2013 rose by 2% today (Tuesday) to 20% – according to InTrade.
This followed an Israeli airstrike on Gaza which killed the leader of Hamsas’ militant wing. The strike came in retaliation for 115 missiles fired from Gaza into Israel in the past week.
Oil prices (Brent) rose 1.4% to almost $110 per barrel on the news. With both sides dug in for a drawn out game of missile retaliation oil prices are likely to stay near current levels, remaining volatile.
Despite the conflict the chances of any actual disruption to oil production is low. The concern is that Iran will be drawn into backing Hamas, drawing Israel into an attack on Iran.