Oil prices experience notable increase
Date
10/7/2024 7:41:23 AM
(MENAFN) Oil prices experienced a notable increase on Friday, driven by escalating concerns regarding potential supply disruptions in the Middle East. International benchmark brent crude saw a rise of 0.53 percent, reaching USD78.03 per barrel as of 10:25 a.m. local time (0725 GMT), up from USD77.62 in the previous session. Meanwhile, the U.S. benchmark West Texas Intermediate (WTI) climbed by 0.52 percent to USD74.09 per barrel, following a close of USD73.71 the day before.
The upward movement in oil prices is largely attributed to a geopolitical risk premium as tensions in the region intensify. U.S. President Joe Biden announced on Thursday that discussions were underway between the U.S. and Israel regarding possible strikes on Iranian oil facilities, a response to Iran's recent missile attack that saw nearly 200 ballistic missiles fired toward Israel.
This announcement contributed to a significant rally in oil prices, which surged approximately 5 percent as fears of supply disruptions loomed larger. The Middle East holds a substantial portion of the world’s oil reserves, making any potential conflict in the region particularly impactful on global oil supply.
Iran has vowed to escalate its response should Israel retaliate for the missile strikes, which were purportedly in retaliation for the killing of several key figures, including Hezbollah Secretary-General Hassan Nasrallah and former Hamas political leader Ismail Haniyeh, along with an Islamic Revolutionary Guards Corps commander.
The situation has further deteriorated as Israel continues its extensive airstrikes in Lebanon, alongside border clashes with Hezbollah. In anticipation of further escalation, the Israeli army announced limited ground raids in southern Lebanon. On Thursday, the military ordered residents in 25 towns in southern Lebanon to evacuate, directing them to move north of the Litani River.
As these developments unfold, the oil markets remain sensitive to any signs of conflict that could disrupt supply, causing traders to adjust their strategies accordingly. The geopolitical landscape in the Middle East is proving to be a significant factor in oil price fluctuations, underscoring the intricate relationship between regional stability and global energy markets.
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