Oil prices could shoot up $20 per barrel if Iranian production sees a hit resulting from Israeli retaliation, according to Goldman Sachs.

U.S. crude futures rose around 5% on Thursday and ticked higher again Friday morning on concerns that Israel could strike Iran’s oil industry in retaliation for Tehran’s missile attack this week.

It is estimated that “if you were to see a sustained 1 million barrels per day drop in Iranian production, that you would see a peak boost to oil prices next year of around $20 per barrel,” Daan Struyven, Goldman Sachs’ co-head of global commodities research, told CNBC’s “Squawk Box Asia” on Friday.

This is under the assumption that oil cartel OPEC+ refrains from responding by increasing production, Struyven said.

Should key OPEC+ members such as Saudi Arabia and UAE offset some of the production losses, oil markets could see a smaller boost of slightly less than $10 barrel, he added.

Since the Israel-Hamas armed conflict began on October 7 of last year, there had been limited disruptions to the oil market, with prices remaining under pressure due to increased production from the U.S. and sluggish demand from China.

However, the sentiment could be shifting this week. U.S. crude oil prices just saw a third consecutive session of gains after Iran launched a ballistic missile attack on Israel, heightening tensions in the region. In recent days, industry watchers have sounded the alarm, warning of a real threat to supply.

Iran, which is a member of OPEC, is a key player in the global oil market. It produces almost four million barrels of oil per day, and an estimated 4% of the world’s supply could be at risk if Iran’s oil infrastructure becomes a target for Israel as the latter considers a countermove. 

Saul Kavonic, senior energy analyst at MST Marquee, raised the potential of Iran’s Kharg Island, which is responsible for 90% of the country’s crude exports, becoming a target.

“The bigger concern, “is this the kind of a much more imminent beginning of a wider conflagration of the conflict which could impact transit through the Strait of Hormuz,” he added.

If Israel hits Iran’s oil industry, supply disruptions in the Strait of Hormuz could become of concern, other analysts echoed.

Iran has previously threatened to disrupt flows through the Strait of Hormuz if its oil sector is impacted.

The strait between Oman and Iran is a crucial channel through which approximately one-fifth of the world’s daily oil production passes, according to the U.S. Energy Information Administration. This strategically significant waterway connects crude oil producers in the Middle East with major global markets.

Asked by reporters Thursday if the U.S. would support an Israeli strike on Iranian oil facilities, U.S. President Joe Biden said: “We’re discussing that. I think that would be a little – anyway.” Oil analysts think those remarks were the catalyst that moved prices higher.

CNBC has reached out to the White House for comment.

“In the case of a full-scale war, Brent would likely soar above USD100/bbl, with any potential shut-in of the strait threatening prices of USD150/bbl or more,” Fitch Solutions’ BMI wrote in a note published Wednesday. 

While the probability of a full-scale war remains “relatively low,” the risks of a misstep by either side are now elevated, BMI’s analysts stated.

Although some industry analysts believe that OPEC+ has enough spare capacity to compensate for a disruption in Iranian exports if Israel targets its oil infrastructure, the world’s spare oil capacity remains largely concentrated in the Middle East, especially among the Gulf states, which could be at risk if a larger conflict worsens.