Yergin: The next 3-5 days will be critical for the global energy markets if Israel and Iran have a significant development.

The next three to five day developments in the Iran-Israel conflict will be crucial for global energy markets, even though the Gulf oil and gas supply has not been interrupted yet. This was the view of oil historian Daniel Yergin on Wednesday.

Iran and Israel launched missile attacks on each other Wednesday, as the air conflict between the two longtime rivals entered its sixth day. This was despite the U.S. president Donald Trump's call for Tehran to "unconditionally surrender" after he had left an early Group of Seven summit over the crisis.

In an interview conducted on the sidelines the Energy Asia Conference, Yergin, Pulitzer Prize winning author of "The Prize", and vice-chairman of S&P Global said: "We appear to be nearing the end of a 46 year battle." He was referring to Iran's hostage crisis that began in 1979.

"The Trump Administration is sending a very clear message. It is a big message that the president left early from the G7 summit. "This is an unprecedented circumstance," he said.

The oil prices have been volatile since Israel's attack on Iran. However, there has not been any disruption in energy supplies coming from the Gulf.

Yergin cited recent remarks by Donald Trump, the U.S. president, signaling possible talks.

"At this stage, the question that remains is: who will negotiate for Iran? It appears that the communication channels and decision-making in Iran would have been disrupted," Yergin stated.

The bunker-buster bombs are a major factor in the negotiations.

Iran has threatened the blockage of the Strait of Hormuz. This is a crucial waterway that connects the Gulf of Oman to the Gulf of Gulf of Arabia, which accounts for a fifth of all oil consumed in the world.

"If the Hormuz were blocked, it would immediately register in the oil prices," Yergin stated.

"But it shouldn't be underestimated, the U.S. Navy had 40 years to plan and prepare so it isn't like it will remain blocked. And those who block it would pay a heavy price." (Reporting and editing by Kate Mayberry; Florence Tan, Reporting)

(source: Reuters)