Israel retaliation may target Iran oil infrastructure, boosting prices further, Wall Street analysts say
The Iranian flag above the new Phase 3 facility at the Persian Gulf Star gas condensate refinery in Bandar Abbas, Iran, in 2019.
Ali Mohammadi | Bloomberg | Getty Images
The oil market faced a rude awakening this week after Iran launched a large-scale ballistic missile attack against Israel, briefly sending crude prices more than 5% higher Tuesday after a period of sleepy trading.
For months now, traders have largely dismissed the risk of a supply disruption in the Middle East. Instead, bearish sentiment swept the market in September as investors increasingly fear a surplus next year due to softening demand in China and increased production from OPEC+.
The expanding war in the Middle East, however, has reached a new boiling point as Israel has vowed a “painful” response to Iran’s attack. The government of Prime Minister Benjamin Netanyahu could take aim at the Islamic Republic’s oil infrastructure in retaliation, geopolitical and crude market analysts say.
“There has been a lot of complacency about this war,” Helima Croft, head of global commodity strategy at RBC Capital Markets, said Tuesday on CNBC’s “The Exchange” shortly after the attack. “We do need to think about a scenario where Iranian oil supplies are at risk.”
Israel could also take aim at Iran’s nuclear facilities, but those buildings are hardened, making them difficult to destroy, said retired U.S. Army Col. Jack Jacobs. A strike on those facilities could trigger an even larger ballistic missile attack by Iran that would be difficult to defend against, he said.
“What is really on the table now and is more likely is an attack on oil facilities,” Jacobs said Wednesday morning on CNBC’s “Squawk Box.”
OPEC member Iran is producing at a five-year high of more than 3 million barrels per day, Croft said. U.S. intelligence in the past has highlighted the potential risk to Iran’s Kharg Island oil terminals, through which 90% of the country’s crude exports pass, according to a Tuesday note from RBC Capital Markets.
“The next turn in this retaliation spiral may very well involve oil – via the degrading of Iran’s oil capacity or Iran’s proxies attacking oil and gas shipping from the Persian Gulf,” Piper Sandler analysts told clients in a Wednesday research note.
The impact on the oil market would depend on the damage done to Iranian crude exports and how the situation escalates from there, said Bob McNally, president of Rapidan Energy. If Iran’s oil exports of around 1.8 million bpd were taken offline, prices would likely jump by at least $5 per barrel, McNally said.
Iran, in turn, would likely retaliate by threatening the 13 million bpd of crude and 5 million bpd of products that are produced in and flow through the Persian Gulf, McNally said. An escalation on this scale could send oil prices higher in increments of $10 per barrel, the analyst said.
“These are dangerous times for oil markets at the moment,” Andy Critchlow, EMEA head of news at S&P Global Commodity Insights, told CNBC’s “Street Signs Europe” on Wednesday. “It’s hard for anyone in the market to really gauge the direction when you look at the amount of geopolitical risk that is out there.”
OPEC, however, has 5.6 million bpd of spare capacity that can be brought back to the market with Saudi Arabia keen to return as much of its oil back to the market as possible, Critchlow said.
“Any disruption to Iranian supplies to the international market I think could be made up by spare OPEC capacity and it’s idled oil at the moment,” the analyst said.
McNally, however, said this oil won’t mean much if there is a major disruption in the Persian Gulf. “Spare capacity won’t help because it’s mostly bottled up inside the Strait of Hormuz,” the analyst said.
Environment
Chinese authorities delay approval for BYD’s pending EV plant in Mexico amid fears of the technology leaking into the US
Booming global EV automaker Build Your Dreams (BYD) has hit a snag with the Chinese government, which has delayed the green light to build a new plant in Mexico amid fears that proprietary technology in the southern part of North America could more easily make its way into the United States
BYD is no stranger to Electrek’s daily EV news beat. The Chinese auto conglomerate continues to prove that it is a global force to be reckoned with, delivering some of the most advanced EV technology within a growing lineup of models across multiple marques.
We’ve already seen BYD expand well outside of its native China into new markets in Asia, Europe, and South America. While we have had opportunities to test drive BYD models in the US, plans to enter its market have been speculation. That prospect appears to be a longshot given the current political climate under the Trump administration and a looming trade war, not only against China but to its neighbors in Mexico and Canada.
Before the current hostile trade environment amongst these global superpowers, BYD had made significant strides in its international production strategy, including new facilities in Brazil, Hungary, and Indonesia. Since 2023, BYD has also been working on erecting a new facility in Mexico and has already delivered some models to the nation, including the Yuan Plus, seen above and below.
According to a new report, however, BYD’s progress in Mexico has been halted by China’s Ministry of Commerce. The ministry is weary of approving said plant in fears that the automaker’s technology could more easily make its way into the R&D centers of EV automakers in the US.
BYD’s Mexico plant on hold as Chinese Ministry weighs risk
Per The Financial Times, China’s Ministry of Commerce has delayed its approval of BYD’s EV manufacturing plant in Mexico, a vital green light required by domestic automakers to produce EVs overseas. A source in the report cited Mexico’s proximity to the United States as the most significant concern for the delay.
Those respective authorities in China fear that BYD’s advanced (and in many cases, leading) technology could more easily end up in the possession of US competitors through Mexico, as the US neighbors to the south would gain unrestricted access to the Chinese automaker’s technology and production practices. Those powers went as far as to suggest that Mexico could even assist the US in gaining access to BYD’s technology.
That level of paranoia is justified and accurately represents the current trade climate and market competition among global trader partners. There is also growing sentiment of animosity toward the US following proposed tariffs on imports from other countries, like China’s hub of Beijing and even Mexico.
Despite China’s fears, Mexico has taken a stand against both Trump (while simultaneously trying its best to maintain a productive relationship with the US) and China, placing its own tariffs on Chinese textiles. Per a source close to the matter:
Mexico’s new government has taken a hostile attitude towards Chinese companies, making the situation even more challenging for BYD.
Trump has accused Mexico of being a “backdoor” for products produced in China to more easily make their way north to US consumers thanks to NAFTA, which is likely another reason for caution among the Chinese Ministry officials.
BYD is one of several Chinese EV automakers attempting to set up shop in Mexico to gain at least some form of presence in North America. In the past year, we’ve seen Hozon Auto sub-brand Neta and ZEEKR sign multiple regional partnerships to prepare for market entry.
However, those plans, including those of BYD, could be on hold for the foreseeable future as the Chinese government weighs the risk and reward of enabling the technology of those companies to be more susceptible to benchmarking tactics from US competitors.
In BYD’s case, it has not entirely ruled out a plant in Mexico. Still, those plans are certainly in limbo, especially since the Chinese automaker lacks a necessary supply chain in the region and would need to import parts from China, which would certainly face higher tariffs. Per BYD executive vice president Stella Li:
Every day is different news, so we just have to do our job. More study has to be done on how we can satisfy and improve to deliver the best result to everybody.
This is a continuing narrative we will keep an eye on.
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Elon Musk has shared a survey that was clearly negative about Tesla last week, but it was made to look positive for Tesla after bots rigged the results.
Tesla’s sales dropped by 41% in Germany last year compared to 2023 despite EV sales surging 27% during the year.
Despite the already bad results in 2024, Tesla’s sales were down 70% in the first two months of 2025.
In 2024, the decline was attributed to tougher EV competition, but this year is even more brutal and different. The sharp decline is attributed to Tesla CEO Elon Musk’s rapidly losing credibility with Germans over his meddling in local elections and promoting the far-right AfD party.
Amid this evident crisis for Tesla in Germany, we reported last week on a survey of 100,000 people by Germany’s popular T-Online publication that showed that only 3% of respondents would consider buying a Tesla vehicle.
Our article on the survey went viral, with millions of views on X:
However, we were surprised yesterday when Musk himself shared the same survey, but with entirely different results.
Musk shared a post that claimed the survey now points to “70% of people in Germany would buy a Tesla again”:
This reversal of the results of the ongoing poll raised some red flags.
Sure enough, T Online has now reported that the survey has been manipulated by bots, with 253,000 votes coming from just two IP addresses in the US:
Where these votes—and the sudden reversal of opinion—came from was initially unclear. At first glance, the number of article views in recent days and the number of survey participants do not seem to match. Initial internal research now shows that 253,000 of the votes cast came from just two IP addresses in the US . This suggests that the survey may have been manipulated.
They shut down the survey after those findings were revealed.
Electrek’s Take
Well, this should help Tesla’s recovery in Germany: manipulating surveys to make it look like people actually would buy Tesla vehicles when they clearly don’t want to and are not buying them.
It was so obviously manipulated.
70% of people want to buy a Tesla, in particular, when most surveys show that EVs, in general, are not even at that level yet.
In addition, Tesla is having issues selling more than a thousand vehicles a month in Germany right now.
The desperation is palpable.
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