According to Reuters, the war between the Islamist group Hamas and Israel is one of the biggest geopolitical risks to oil markets since Russia’s invasion of Ukraine last year.

Unlike Russia, one of the world’s largest oil and gas producers, Israel has very modest energy production. But there is a risk that the war could spill over into the Middle East’s main energy producers and affect oil and gas flows.

While these flows have yet to materialize, analysts and market watchers point to several serious potential complications if the conflict escalates.

First, the U.S. could increase or increase sanctions against Iran if it were involved in a Hamas attack on Israel, which could further strain an already underserved oil market.

Iran can retaliate by cutting off the energy flows of its OPEC neighbors through the Strait of Hormuz.

Second, the Washington-brokered agreement to normalize relations between Saudi Arabia and Israel, which could lead to an increase in oil production in the kingdom, could be derailed.