Redeye Macro Note: Geopolitical Tensions, Oil and Gas Impacts

In this Redeye Macro Note, we discuss the latest geopolitical tensions simmering between Israel & Iran, and talk about the oil and gas impacts delivered today by both sides, as things escalate.

Good Saturday evening MacroEdge Readers and Community,

There’s plenty to write about over the developments of the last 48 hours, but tonight we’re focused particularly on energy infrastructure (and energy prices), which have come under new strain amid the recent escalation. Strikes on both the Iranian side and the Israeli side have already caused disruptions that are rippling through regional energy markets. While much of the attention has been on immediate geopolitical fallout, what’s equally important is the emerging picture of infrastructure vulnerability, from key refineries to oil transport corridors, that could shape critical energy pricing (and thus inflation) + security in the weeks ahead.

The conflict isn’t just noise… and my primary focus is not on how equity markets will respond, in this particular note. The risk premium was building in energy markets, and we’re watching to see how the energy complex, particularly Brent and WTI (as well as natural gas), respond as new headlines roll in. Crude on Friday finished the day up almost 10%, and if impacts worsen over the next 24 hours – we could see a similar move in the futures market. If we see a calming of tensions, which now looks unlikely, by tomorrow evening US time – then gains may be moderated as fears abate in the interim. Meanwhile, downstream impacts, from shipping insurance costs to inventory hoarding, can also start to creep in, even before any effective embargo like a shutdown of the Strait of Hormuz, or export disruption takes hold.

We’ll keep this one brief tonight, but next Saturday we’ll be diving deeper. Our first ‘Welcome to AlphaSights’ report will be a deep-dive analysis of the oil and gas sector, where the real risks lie, how the private markets are pricing them, and what we’re projecting for Q3 and Q4 + through 2026 in spot prices and beyond. We’re also excited to embark on a new ‘weekly macro video series’ that we’ll begin work on in the upcoming week. We expect the first macro video release to be in two weeks on Friday at 12pm EST.

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Geopolitical Tensions Accelerate

Over the last 24 to 48 hours, geopolitical tension has accelerated sharply, with Iran ramping up its responses in a clear effort to limit the effectiveness of Israeli missile defense systems. This latest phase has been more aggressive, with Iran deliberately testing for weak points in Israel’s air defense by layering different types of drones and missiles & pushing volume to the point where Israel has to burn through interceptors. go next. If we start to see Israeli targeting shift toward key export infrastructure like Kharg Island, or if there’s a legitimate move to shut or block the Strait of Hormuz by Iran - we’re looking at a completely different market and energy environment.

In my opinion - in that case - the U.S. and China both have too much at stake to sit it out. Hormuz alone represents nearly 20% of global oil supply. You close that, even temporarily, and it triggers a surge in prices and a new wave of global shipping and insurance disruptions that will have to be addressed immediately.

We’ll be watching the next 48 hours closely. Everything that’s happened so far has been quite measured to how bad things *could be*, but if this escalates further, especially around energy chokepoints, this won't be limited to just Israel and Iran.

Oil and Gas Impacts

Today marked an escalation in the conflict as critical infrastructure on both sides began targeting oil and gas infrastructure. We break down the key infrastructure impacts below, and these may shift before our report tomorrow (and longer report next Saturday for AlphaSights).

Iran

• South Pars gas field – Phase 14
  Hit by Israeli air/drone strikes, igniting a fire that forced shutdown of one processing unit. Estimated volume lost: ~12 million m³/day (~423 MMBTU equivalent). This is a material reduction in output from Iran’s largest gas field.

• Asaluyeh (Bushehr province) refinery & gas facilities
  Struck alongside South Pars, with large fires reported. Likely disrupted condensate processing and LPG/NGL outputs.

• Tehran-area oil depots
  Two fuel depots—one in northwest Tehran and another south of the city—were bombed, triggering flames and smoke. Disruption may affect daily refined product supply, though exact barrels are not yet disclosed.