Global oil prices climbed 4% Monday over fears that the unprecedented weekend attack on Israel by Hamas could escalate into a regional conflict embroiling oil-producing nations. Global energy markets have been on a rollercoaster in recent weeks. Following months of rising prices — driven mostly by production cuts by Saudi Arabia and Russia — Brent logged its sharpest weekly fall since March Friday as traders anticipated a drop in demand. Yet oil prices might now be at the start of a sustained resurgence, analysts say. But why — if Israel doesn’t produce any oil — are traders apparently so nervous? “The impact on supply and demand is pretty much zero so far. The [attack] itself has no effect on the oil market directly,” Homayoun Falakshahi, a senior oil analyst at data provider Kpler, told CNN. However, wary investors are pricing in “some geopolitical risk,” he said. Tighter oil sanctions? The biggest risk for oil prices is how tensions between Israel and its arch-enemy Iran play out. Israel has long accused Iran of engaging in a form of proxy war by backing groups — including Hamas — that have launched attacks on its shores. US Deputy National Security Adviser Jon Finer reiterated Monday that, while Washington believed Iran was “broadly complicit” in Hamas attacks in Israel because it had provided weapons, training and other support in the past, the United States did not at this time have “direct information” linking Iran to this unprecedented assault. On Monday, Iran’s mission to the United Nations denied involvement in the weekend attacks. “We emphatically stand in unflinching support of Palestine; however, we are not involved in Palestine’s response, as it is taken solely by Palestine itself,” the mission said in a statement to CNN. Still, the situation could escalate. Israel has counted 900 dead so far — marking one of the bloodiest assaults in the country’s history — and Israeli Prime Minister Benjamin Netanyahu has formally declared war against Hamas. Gaza is now under siege. If a clear link to Iran emerges, analysts say, some kind of an intervention by the United States cannot be ruled out. That would likely entail tighter enforcement of existing sanctions on Iran’s oil exports. Washington restored sanctions on Iran’s oil in 2018 after former President Donald Trump tore up a nuclear deal negotiated under his predecessor Barack Obama. But Iran’s oil production has surged by 700,000 barrels per day this year as Washington relaxed its enforcement of those sanctions, according to Brussels-based think tank Bruegel. Simone Tagliapietra, a senior fellow at Bruegel, told CNN that the United States had softened its stance in recent months to help secure the release of five American prisoners in Iran, as well as to keep oil flowing to the global market after Western sanctions imposed on Russia over its war in Ukraine squeezed supply. Should Washington decide to tighten the sanctions screw once more, “current flows to the global oil market might be compromised,” he added. The United States could monitor tankers suspected of shipping Iranian oil to the global market more closely, and it could also act “by tightening the provision of insurance services to them,” he said. Trading houses dealing in Iranian oil are mostly based in Hong Kong, mainland China, Oman and the United Arab Emirates, noted Falakshahi of Kpler, and the US could target them. Even so, Iran’s influence on the global oil market is limited. According to Kpler data, the country exported only about 1.4 million barrels a day of crude in the third quarter, accounting for a maximum of 1.4% of global supply. Gulf ‘game-changer’? A more remote, but perhaps more serious, risk to the oil market is the possibility that the conflict spills over into the Strait of Hormuz, a narrow waterway off Iran’s southern border through which 37% of global seaborne oil exports travel each day. If Hezbollah — a Lebanese paramilitary group also backed by Tehran — joins the conflict, it could provide the next flashpoint that would entangle bigger regional powers such as Iran and Saudi Arabia, analysts told CNN. Hezbollah claimed responsibility Sunday for firing missiles and artillery into three sites in Shebaa Farms, an area considered by Lebanon to be under Israeli occupation. An intervention by Iran could potentially involve disruptions to the flow of oil through the Strait of Hormuz. “That would be a complete game-changer for the oil market,” Falakshahi said. “We wouldn’t see a 2% [price] spike, we’d see a 20% spike.” But although that risk exists, he added, “it’s still very far from where we are now.” The United States, aware of the vulnerability of the trading route, has kept an “extensive military presence in the Gulf,” said Tobias Borck, a senior research fellow at the Royal United Services Institute for Defence and Security Studies. It is far too early to speculate on an outcome as dramatic as this, Borck added. The current Israeli-Hamas conflict would need to expand “very far outside the Israeli geographic area” to provoke such a move by Iran or Iranian-linked groups. — Artemis Moshtaghian contributed reporting.