The prospect of an all-out war in the Middle East increased after Iran launched a massive missile attack on Israel on October 1.
Israel has threatened retaliation, fueling concerns of a disruption to the flow of oil and gas from the energy-rich region.
Global oil prices have already soared 9 percent since Iran's attack, which came amid Israel's yearlong war in the Gaza Strip and its invasion of southern Lebanon earlier this month.
A full-scale conflict between Israel and Iran could upend the international energy supply and send shock waves throughout the global economy, experts warn.
"Major disruption of regional oil and gas exports is likely to have a material impact on the global economy," said Farzan Sabet, senior research associate at the Geneva Graduate Institute.
'Act Of Aggression'
Israeli media reports suggest the country could target Iran's nuclear sites or its oil or gas installations.
A man jumps off the apparent remains of a ballistic missile lying in the desert, following an attack by Iran on Israel, near the southern city of Arad, Israel, on October 2.
U.S. President Joe Biden cautioned Israel against hitting oil facilities in Iran, one of the world's biggest producers. Iran has warned that any attack on its infrastructure would "provoke an even stronger response" from Tehran.
If Israel carries out a major attack against Iran's oil or gas facilities, Tehran could "resort to placing pressure on important transit chokepoints like the Strait of Hormuz," Sabet said.
Iran has for years threatened to block the strategic Strait of Hormuz, through which a fifth of the world's oil supply flows.
"The Strait of Hormuz is critical to the global economy," said Neil Quilliam, an energy policy and geopolitics expert at London's Chatham House think tank.
Qatar, one of the world's biggest producers of natural gas, also uses the Strait of Hormuz for its exports.
There are also concerns that Tehran could target oil installations in neighboring countries if it is attacked by Israel. Iraq, Kuwait, the United Arab Emirates, Saudi Arabia, and Iran are among the world's top oil-producing states.
Iranian President Masud Pezeshkian, during a trip to Qatar last week, met with senior officials from the Gulf Arab states. The officials sought to reassure Iran of their neutrality in the conflict between Tehran and Israel, according to reports.
Sabet said any Iranian retaliation against a possible Israeli attack that affects global energy prices or trade would be "viewed as an act of aggression and lead to further pressure on Iran."
Quilliam said Israel is likely to strike targets that will "hurt the Iranian regime and affect the country's economy" rather than impact global oil markets.
'Feel The Price Hike'
In recent decades, there have been major energy price hikes following the Arab oil embargo in 1973 and the Islamic Revolution in Iran in 1979.
Israel's Iron Dome anti-missile system intercepts rockets, as seen from Ashkelon, Israel, on October 1.
Those events led to major gas shortages in some countries and endless lines for drivers filling up their cars.
But experts said even a major disruption to the flow of oil and gas from the Middle East stemming from an all-out Israel-Iran conflict would not cause the global economy to spiral out of control. That is largely due to the rise of the United States as a major oil and gas supplier as well as the decreasing global reliance on fossil fuels.
"Western consumers will feel the price hike at the pump," Sabet said. "[But] it will be much less than it might have been in a previous era."
He points to how repeated warnings about the disruption of commercial shipping in the Red Sea by the Iran-backed Huthi rebels in Yemen have not resulted in significant consumer inflation in the West.
But Sabet says a major disruption to the flow of oil and gas from the Middle East would have "an outsized effect" on the Chinese economy.
Beijing imports an estimated 1.5 million barrels of oil a day from Iran, accounting for 15 percent of its oil imports from the region.
Sabet said increased energy prices for China would "filter through the supply chain to the manufactured goods the country exports to the United States, Europe, and elsewhere" and potentially result in "more inflation for consumers."