Oil prices rally on fear of Middle East supply disruptions

Oil prices rally on fear of Middle East supply disruptions
Oil prices rally on fear of Middle East supply disruptions

We show you our most important and recent visitors news details Oil prices rally on fear of Middle East supply disruptions in the following article

Hind Al Soulia - Riyadh - LONDON — Oil prices jumped by 4% on Monday on concerns that the situation in Israel and Gaza could disrupt output from the Middle East.

West Texas Intermediate (WTI), the benchmark for US oil, rose to more than $86 (£70) a barrel.

The price of Brent crude also surged in early Asian trading.

The Israel and Palestinian territories are not oil producers. But the Middle Eastern region accounts for almost a third of global supply.

A wave of attacks launched by the Hamas militant group on Saturday was the biggest escalation between the two sides for decades.

Western nations condemned the attacks but a spokesperson for Hamas told the BBC that the group had direct backing for the attack from Iran.

Iran denied involvement in the attack at at UN Security Council meeting in New York on Sunday, Reuters reported. But Iranian President Ebrahim Raisi has expressed support for the attack.

"The risk premium on oil is rising due to the prospect of a wider conflagration that could spread to nearby major oil producing nations such as Iran and Saudi Arabia," energy analyst Saul Kavonic told the BBC.

"If the conflict envelops Iran, which has been accused of supporting the Hamas attacks, up to 3% of global oil supply is at risk," he added.

Around a fifth of global supply would be "held hostage", Kavonic said, if passage through the Strait of Hormuz, a vital oil trading route is disrupted.

The Strait of Hormuz is crucial for the main oil exporters in the Gulf region, whose economies are built around oil and gas production.

Uncertainty over how events could develop in the coming days may also drive investments into US Treasury bonds and the dollar - which investors traditionally bought at times of crisis, said James Cheo from HSBC bank.

"At this stage, there is a bit of nervousness. [Investors] want to see a little more clarity, particularly on economic data and on developments associated with geopolitical uncertainty," added Cheo, the Southeast Asia and India chief investment officer of the bank's private banking and wealth management division.

Following Russia's invasion of Ukraine in February 2022, oil prices soared, hitting more than $120 a barrel in June last year.

They fell back to a little above $70 a barrel in May this year, but have steadily risen since then as producers have tried to restrict output to support the market.

Saudi Arabia, a major oil producer, said it would make cuts of million barrels per day in July.

Other members of Opec+, a group of oil-producing countries, also agreed to continued cuts in production in an attempt to shore up flagging prices.

Opec+ accounts for around 40% of the world's crude oil and its decisions can have a major impact on oil prices. — BBC


These were the details of the news Oil prices rally on fear of Middle East supply disruptions for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at Saudi Gazette and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

PREV Kamala Harris tells Netanyahu 'it is time' to end war in Gaza
NEXT US military raises alert level for Europe bases: reports

Author Information

I am Joshua Kelly and I focus on breaking news stories and ensuring we (“Al-KhaleejToday.NET”) offer timely reporting on some of the most recent stories released through market wires about “Services” sector. I have formerly spent over 3 years as a trader in U.S. Stock Market and is now semi-stepped down. I work on a full time basis for Al-KhaleejToday.NET specializing in quicker moving active shares with a short term view on investment opportunities and trends. Address: 838 Emily Drive Hampton, SC 29924, USA Phone: (+1) 803-887-5567 Email: [email protected]