In recent days, tensions in the Middle East have escalated, with oil prices recently surpassing $80 per barrel. Investors may be increasingly concerned about the impact of this conflict on oil supply. Malcolm Melville, manager of the Schroders Global Energy Fund, stated that although OPEC has significant spare capacity, the risk of severe supply disruptions is increasing, and the future trend of oil prices will depend on the balance between the two. Senior emerging market economist David Rees pointed out that oil prices breaking $100 per barrel and staying at that level for a prolonged period would have any substantial impact on inflation prospects or put pressure on current interest rate policies of central banks around the world. Malcolm Melville stated that without considering OPEC's proposals, the supply-demand situation is relatively balanced until 2025. Rate cuts in developed markets and recent economic stimulus measures in China may drive demand growth, but the expected growth in demand will be offset by slight production increases in various producing countries. However, OPEC has reduced supply in recent years to stabilize oil prices, resulting in OPEC losing its market share, especially to the United States. OPEC plans to resume additional supply starting in December 2024. Its spare capacity is currently quite ample, at around 5 to 6 million barrels per day, while global oil demand is at 102 million barrels per day. This could mean that an oversupply of oil could gradually emerge. Investors are concerned that Israel may target Iranian oil facilities on the island of Kharg in the Persian Gulf. Most of Iran's daily oil exports of 1.7 million barrels come from Kharg Island, which is one of the world's largest oil fields. However, if Israel were to weaponize the destruction of the Kharg Island oil field, Iran may retaliate and could take action to disrupt the flow of oil through the Strait of Hormuz, through which about 20% of global oil flow passes. If Israel were to attack Iran's oil facilities on Kharg Island, global oil prices could spike to around $85 to $90 per barrel, which would be manageable for the market and is the level seen in April 2024. However, if Iran were to hint at taking action in the Strait of Hormuz, oil prices could sharply rise. Malcolm Melville believes that the return of oil prices to the historical high of $147 per barrel is not entirely impossible, as this could potentially lead to the market losing 20% of its supply. David Rees, senior emerging market economist at Schroders Global Investments, stated that they simulated an "Middle East Conflict" economic scenario a year ago. This is a low probability, high impact scenario, with the major impact on other areas of the world being through oil prices, which would result in inflation higher than their baseline forecasts. In this scenario, oil prices would rise to over $100 per barrel, possibly reaching $150. However, so far, oil prices have struggled to break above the $80 per barrel level.