London
CNN
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Global oil prices have soared in recent days as the conflict in the Middle East reaches its peak. They could rise even further if Israel's escalating war affects the vital Strait of Hormuz off Iran's southern coast.

The narrow waterway — just 21 miles (34 kilometers) wide at its narrowest point — is “the world’s most important bottleneck for oil transportation,” according to the U.S. Energy Information Administration.

About a fifth of the world's oil trade passes through the strait every day, it is said Simone Tagliapietra, senior fellow at the Brussels think tank Bruegel. It also accounts for about a quarter of the world's daily trade in liquefied natural gas.

As the conflict in the Middle East escalates, so does the risk of an interruption in the flow of oil through the strait – or even a complete standstill.

Last week, Iran fired rocket fire at Israel in retaliation for Israel's killing of Hassan Nasrallah, the leader of Hezbollah, an Iran-backed militant group based in Lebanon other. Israel's Defense Minister Yoav Gallant told CNN on Sunday that the country was preparing a counterstrike against Iran and that “everything is on the table.”

Tagliapietra described the feverish situation as “very serious,” adding that any increase in tensions in the Strait of Hormuz could have similar consequences to the oil shock of the 1970s, when oil prices “went through the roof.”

In 1973, oil prices surged as major Arab oil producers stopped exporting the commodity to the United States and other countries in response to their support of Israel in the Arab-Israeli war that year. The embargo led to fuel shortages and long lines at gas stations in the United States.

Oil prices have risen this year since Israel began targeting Hezbollah in late September, but not dramatically, as investors become more concerned about weak demand in beleaguered China and an oversupply of global oil.

The price of a barrel of Brent crude, the global benchmark, has risen just over 5% since September 17 to $77. At that time, pagers belonging to Hezbollah members exploded almost simultaneously throughout Lebanon in an attack staged by Israel. West Texas Intermediate, the U.S. oil benchmark, is up 3.6% in that time and is trading at nearly $74 a barrel.

However, if oil trade through the critical Strait of Hormuz falters, prices could rise to over $100 a barrel, sending gasoline prices soaring, according to research firm ClearView Energy Partners.

Richard Bronze, co-founder and analyst at data firm Energy Aspects, wrote in a note on Monday: “We believe the likelihood of Iran disrupting the Strait of Hormuz remains relatively low for now.” But decision-making in Iran has become less predictable .”

“If Israel hits back hard enough this time – for example (through) an intensive attack on Iranian nuclear facilities – we cannot rule out Iran trying to close the strait,” he added.