Oil prices have been crushed by worries about weaker demand and a slowing global economy, but the market could begin to price in greater geopolitical risks if there are more attacks like the one on two oil tankers in the Gulf of Oman on Thursday. But even as analysts say oil could rise on Mideast tensions, they also note it could fall back to the bottom of a wide range — between about $50 and $80 for Brent, if the trade war fears dim the economic outlook for the buyers of oil. "I wouldn't say we're at a tripwire yet, but we're getting there," said John Kilduff, partner with Again Capital. Kilduff said oil was headed to $50 until the news of the attack. There have also been forecasts that if the situation in the Middle East intensifies, the price of crude could touch $100. After losing 4% on worries of oversupply Wednesday, crude futures bounced back about 2% Thursday on reports the tankers sustained significant fire damage. The attacks were the second such incident involving oil shippers in just about a month, near the entrance to the Strait of Hormuz, the world's busiest oil shipping lanes. West Texas Intermediate crude futures settled at $52.22, up 2.2% on the day, while Brent crude futures for May closed up 2.2% at $61.31, after touching a high of $62.64 per barrel. "You're in the $60s or $80s. If it's all about trade wars, the economy is tanking" and oil would head toward $60, said Helima Croft, head of global commodities strategy at RBC. "That's the binary nature of this market." She said a major geopolitical incident could drive the price of Brent as high as $80, especially if trade worries dissipate.

A positive meeting between President Donald Trump and Chinese President Xi Jinping at the G-20 later in the month could also be a catalyst for oil, if it points toward a trade agreement, she said. "I think the oil traders don't know how to deal with Iran risk, but they do know how to conceptualize a trade war destroying demand. They can't distinguish in the Middle East between what is noise and what is the brink of a shooting war," she said. "The summer is going to be this: What war is going to dominate the market? A trade war or a shooting war?" U.S. Secretary of State Mike Pompeo said Iran was behind Thursday's attack and other attacks in the region. The two ships are the Japanese-owned Kokuka Courageous, a chemical tanker that was loaded in Saudi Arabia and was enroute to Singapore, and the Front Altair. The Front Altair was carrying a cargo of naptha, a petrochemical feedstock, from the Persian Gulf to CPC Taiwan. While oil rose on the incident, it did not move as much as it would have in the past on a scare in the Gulf region. The geopolitical premium has become less of a factor in the market, since U.S. oil production has become such a dominant force on the global market. The U.S. is now the world's largest oil producer, with output of 12.3 million barrels a day last week, about 1.5 million barrels a day more than this time last year. "The supply in the U.S. has become a firewall against geopolitical events," said Kilduff. But analysts say the market has been ignoring the potential for more attacks on Middle East oil assets, even as the U.S. sanctions bite into Iran's economy and limit its ability to sell oil. Even so, Brent is down about 18% since the end of April. "It is a factor that the market sell-off has ignored," said Ed Morse, Citigroup's global head of commodities research. "The world is fairly fragile, and we could see a higher probability of a drop in production generated by political events, rather than by economic tightness, and it could be Iran. It could be Iraq. It could be Libya. It could be Nigeria. It could be Venezuela."