The price of benchmark Brent crude oil broke through $90 on 13 October as Israel prepared to launch an armed assault in Gaza and speculation grew that Iran might intervene on behalf of terrorist group Hamas.

“We’re headed to $100 a barrel this quarter, no matter what,” analyst Joe DeLaura at consulting firm Rabobank said to the Financial Times. “No one in the right frame of mind will hold a short position in oil when Israel…threatens a massive escalation.”

Still, markets have not yet priced in a wider war. “Otherwise, we would be higher in oil and way, way higher in gas,” consultant David Hewitt at Hewitt Energy Perspectives told the FT. 

The conflict has not immediately affected the region’s oil production and is unlikely to “trigger a substantial surge” in oil prices this year, JPMorgan analysts wrote in a note, but that could change if the U.S. strictly enforces clamps on Iran’s oil exports or if the conflict disrupts oil traffic through the Strait of Hormuz, a crucial transit point for the Mideast’s oil exports.

Israel’s march into Gaza could bring other factions, such as the militantly anti-Israel Hezbollah, into the conflict. Iran is known to fund and support Hezbollah.

“Cutting off water, food, electricity, and medicine for Gaza is an organized war crime which could cause reactions by others in the ‘axis of resistance’,” Iran’s foreign ministry warned on 12 October.

“Markets will remain on tenterhooks as the crisis unfolds,” the International Energy Agency warned in a note last week. 

TREND FORECAST: The Mideast war is unlikely to be short; wars involving guerilla and terror groups never have been.

The longer the conflict slogs on, the more likely it is that other players will become involved. Hezbollah is already mustering fighters on the Lebanese border and Iran has made statements indicating its continued support for Hamas.

Markets dislike uncertainty. The longer the war lasts, the longer oil prices will remain high. 

If Iran becomes overtly involved in the conflict, the Strait of Hormuz – a key bottleneck for oil shipments out of the Middle East – becomes threatened: Iran has the greatest land mass along the Persian Gulf and could shut the strait if it chooses to. In the past, it has attacked ships transiting the strait.

Iran’s decision whether to step in will be key to the direction and duration of the war—and to those of oil’s price and, therefore, the global economy.