Oil prices have seen a rise amid fears that the ongoing Israel-Hamas conflict could escalate and involve more nations in the Middle East. The benchmark for oil prices, Brent crude, reached $89 per barrel earlier today, before falling back to $86. While the price is still down compared to the past month, it marked a more than 3% increase following the recent Hamas attacks on Israel and the strikes on the Gaza Strip.
Less than a month ago, the price of Brent crude stood at $94 per barrel. The surge in oil prices has raised concerns as it affects the cost of petrol and diesel, leading to potential increases in transportation and production costs, which rely on oil. Additionally, such rises in energy costs can fuel inflation.
One of the factors contributing to market worries is the potential involvement of Iran, an oil-exporting nation, in the conflict. Israel has claimed that Iran may have funded or supported Hamas. The firing of rockets into Israel from Lebanon has further added to concerns of a broader, multi-state conflict.
Investors are closely assessing the situation and the potential impact on oil supply in the Middle East if other countries become involved. Susannah Streeter, the head of money and markets at Hargreaves Lansdown, stated, “There are concerns that deep and incessant retaliative strikes on Gaza could potentially bring Iran into the conflict and have an impact on the flow of energy in the region.”
The recent increase in oil prices can also be attributed to supply cuts by major oil exporters, Saudi Arabia and Russia.
The rise in oil prices due to geopolitical tensions highlights the vulnerability of global energy markets. The Middle East remains a crucial region for oil production, and any disruption in supply could have far-reaching consequences. As tensions continue to escalate in the Israel-Hamas conflict, the international community will closely monitor the situation and its potential impact on oil prices and global energy stability.
It is worth noting that the information provided in this article is based on current market trends and assessments, and the situation remains fluid. Any major developments in the conflict or involvement of other nations could further impact oil prices and energy markets.
More detail via Sky News here… ( Image via Sky News )