Iran Targets Oil Infrastructure as Crude Price Hovers Around $90

Iran's recent attacks on Saudi Arabia and other US allies in the Middle East have raised questions about the stability of the region. The Mecca Joint Defence Agreement, a tripartite defence deal among Turkey, Pakistan, and Saudi Arabia, has been put to the test.

The agreement states that any armed attack against one of the three countries shall be regarded as an attack against them all. However, Iran's proxy attacks on Saudi Arabia have highlighted the complexities of this pact. Tehran wants to disrupt oil supply and fuel crude oil price rise, which would weigh on the global economy due to soaring inflation and fiscal deficit.

Anuj Gupta, a SEBI-registered market expert, said that Iran is targeting the oil infrastructure to disrupt the oil supply to the world. He noted that once the Brent crude oil price crosses above the psychological $100 mark and sustains above this level for two weeks, Tehran believes global pressure will come on the US administration.

The Pakistan-Turkey-Saudi Arabia trilateral defence deal gets jeopardised by Iran's fresh proxy attacks on Saudi Arabia. Even though the full text of the deal has never been published, Hakan Fidan, Turkey's foreign minister, stated that if one member is attacked, the others consult to determine the nature and scale of any assistance.

The pact hasn't been tested yet, and it's unclear how Turkey and Saudi Arabia would react in a scenario like Operation Sindoor between India and Pakistan. Turkish Foreign Minister Hakan Fidan's statement assumes high significance, as he said that an attack on a member country will be considered a common threat only if that country formally requests assistance.