(Bloomberg) — Oil rose for a third day as traders assessed supply risks in the Middle East, with Israel expected to make a retaliatory strike against Iran following Tehran’s missile barrage earlier this week.

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Brent crude climbed toward $75 a barrel after advancing almost 3% over the prior two sessions, while West Texas Intermediate was near $71. Israel has threatened reprisals against Iran, although US President Joe Biden has said the country should hold off from attacking its nuclear facilities.

The oil market has been transfixed by the latest crisis in the Middle East, which comes after a year of turmoil as Israel faces off against Iran and its proxies in Gaza, Lebanon, Yemen and elsewhere. The region accounts for about a third of global supply, and traders are concerned the latest escalation could hit flows if energy facilities are attacked or supply routes blocked.

A major strike by Israel on Iran’s oil-exporting capacity could take 1.5 million barrels of daily supplies off the market, according to Citigroup Inc. If Israel struck minor infrastructure, such as downstream assets and storage facilities, between 300,000 and 450,000 barrels of output could be lost, analysts including Francesco Martoccia said in a note.

The latest price spikes caused a gauge of Brent’s implied volatility to surge to the highest in nearly a year. Options markets have also taken on a bullish tone, with Brent skews now favoring calls — which profit when prices rise — over the opposite puts as of Wednesday’s close.

Beyond the crisis, there are signs of ample supplies. OPEC+ plans to restore some of its shuttered capacity, with increases set to start from December after a two-month delay. In the US, meanwhile, official data showed crude inventories unexpectedly rose by 3.9 million barrels last week, their biggest increase in about five months.

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