rewrite this title and make it good for SEOHow Iran’s response to Israel’s strike could shake up global markets — in 5 scenarios

How Israel’s strike on Iran could affect the global markets largely depends on the scale, nature and duration of Iran’s response.

In the worst-case scenario, oil prices may surge to $120 per barrel, according to Lazard Geopolitical Advisory.

Oil prices rose on Friday, with U.S. benchmark West Texas Intermediate crude for July delivery CL.1 CLN25 up 7.4%, near $73 a barrel, after climbing as high as $77.62 after Israel launched strikes on Iranian nuclear sites and military officials. Iran retaliated on Friday by launching dozens of missiles towards Israel, the Israel Defense Forces said.

Stocks DJIA SPX COMP were sharply lower Friday, but the conflict’s broader impact on global markets mostly depends on Iran’s response, Lazard analysts noted.

They put together a list of five potential response scenarios — with the most likely one being that Iran targets Israel directly, which may lead to an increase of $10 to $20 per barrel in oil prices and an increase to the cost of energy and goods in the region, the analysts wrote in a Friday note.

It’s also highly likely that Iran targets U.S. military or diplomatic assets in the Middle East, which may lead to an upward swing in oil prices to $80 or $90 per barrel, according to the analysts. That poses medium to high risks to global markets, they noted.

In a more severe outcome, oil prices could jump to $85 to $105 per barrel if Iran attacks Gulf oil-and-gas infrastructure, which could lead to a rise in global inflation expectations. Such a scenario looks less likely to happen compared with the previous two, Lazard analysts said.

The worst-case scenario, however, would be a disruption to or the closure of the Strait of Hormuz, a key shipping route for Middle East energy exports.

Read: Why the Strait of Hormuz is now a major focus of worry for oil prices and the global economy

That outcome, seen as unlikely, could lead to a surge in oil prices to up to $120 per barrel, potentially causing oil-driven inflation to reach crisis levels, the analysts noted. It also could cause severe disruptions to the global supply chain, they added.