RBC analyst Helima Croft on US Iran strikes: oil price impact of today's military action will depend on whether IRGC folds in face of aerial onslaught

RBC analyst Helima Croft on US Iran strikes: oil price impact of today's military action will depend on whether IRGC folds in face of aerial onslaught

RBC Analyst Helima Croft on U.S.-Iran Strikes: Oil Price Impact Hinges on Iranian Regime’s Response

RBC Capital Markets’ Helima Croft, head of global commodity strategy, emphasized that the oil price implications of recent U.S. and Israeli military actions in Iran will depend critically on whether Iran’s Islamic Revolutionary Guard Corps (IRGC) perceives an existential threat and retaliates by disrupting Gulf energy infrastructure. With U.S. forces now engaged in “major combat operations” targeting Iranian nuclear sites and southern Tehran ministries, markets are bracing for volatility as the conflict escalates.

Croft highlighted that Iran’s potential response—particularly its ability to weaponize the Strait of Hormuz—could determine the magnitude of oil price swings. The strait, through which 20% of global oil flows, remains a strategic vulnerability. Tehran has already begun jamming ship transponders and issued warnings from QatarEnergy and Greece’s shipping ministry for vessels to avoid the region. If Iran mines the strait or attacks oil tankers, global supplies could face prolonged disruptions, pushing prices above $100 per barrel.

Historical precedents underscore the risks. JPMorgan noted that regime changes in major oil-producing nations since 1979 have triggered average oil price spikes of 76% at their peaks, stabilizing 30% higher than pre-crisis levels. For example, the 1979 Iranian Revolution tripled oil prices, while Libya’s 2011 uprising sent Brent crude to $130 per barrel. Croft warned that an Iranian regime collapse could have an even greater impact than Libya’s crisis, given Iran’s larger production scale.

However, analysts remain divided on the likelihood of sustained disruption. Rapidan Energy Group’s Scott Modell noted that while Iran could target Gulf oil facilities if its survival is at stake, the regime has so far avoided actions that would halt its own oil exports. U.S. and Israeli strikes have focused on Iran’s nuclear infrastructure, with no immediate closure of Kharg Island, Iran’s primary oil export terminal.

Markets are pricing in a short-term spike, with U.S. crude and Brent futures projected to open $3–$5 higher Sunday evening. Yet longer-term outcomes will hinge on whether the conflict remains contained or escalates into a broader regional war— a scenario that could trigger historic price surges exceeding $130 per barrel. As Croft observed, “The oil market is watching Tehran’s next move closely. If the IRGC folds, the crisis could abate. But if they strike back at the strait, prices will follow.”