The U.S. is discussing strikes on Iran's oil facilities as retaliation for Tehran's missile attack on Israel, President Joe Biden said on Thursday, while Israel's military pressed ahead with its campaign against Iran-backed armed group Hezbollah in Lebanon.

What worries oil traders the most as tensions build in the wake of Iran’s missile attack on Israel is a potential disruption to the flow of crude in the Middle East — and when it comes to Iran, export terminal Kharg Island could be a key target for the Israel Defense Forces.

Oil prices rose on Wednesday as investors reacted to escalating tensions in the Middle East following Iran's missile attack on Israel. Concerns over disruptions to energy supplies intensified, driving market uncertainty and pushing prices higher.