Oil prices surge to six-week high
Date
10/8/2024 8:30:03 AM
(MENAFN) Oil prices have surged to a six-week high, reaching nearly USD80 (EUR61) a barrel for brent crude, driven by rising tensions and violence in the Middle East. This price increase follows a notable gain of 9.1 percent last week and reflects ongoing concerns about the region's stability, particularly following Israel's military actions against various groups, including Hamas in Gaza and Hezbollah in Lebanon.
Since the attack on Israel on October 7, 2023, the geopolitical situation has acted as a catalyst for fluctuations in oil prices. The ongoing conflict involves not only local groups but also their backers, notably Iran, which has historically influenced oil market dynamics. Despite some periods of relative price calm, recent developments have reignited fears of significant disruptions in a region crucial for global oil supply.
In previous weeks, market sentiment had been tempered by worries about declining global demand, particularly from China. However, the escalation of Israel's ground offensive in Lebanon has shifted market perceptions. Investors are now anxious about potential retaliatory strikes by Israel on Iranian oil infrastructure in response to rocket attacks on October 1. U.S. President Joe Biden has publicly urged Israel to refrain from such actions, highlighting the delicate balance of interests in the region.
The trajectory of oil prices has seen considerable volatility over the past few years. Following Russia's invasion of Ukraine in May 2022, Brent crude prices soared above USD122, influenced by Western sanctions on Russia and other factors affecting supply chains. Prices eventually retreated but were pushed upwards again in September 2023 due to concerns about dwindling stockpiles. The resurgence in oil prices is compounded by the heightened tensions after Hamas's cross-border attack, further complicating the already fragile situation.
As the conflict continues to unfold, the oil market remains on high alert, closely monitoring the developments in the Middle East that could lead to further disruptions in supply and increased price volatility. With potential threats to oil infrastructure and shifting geopolitical alliances, the outlook for oil prices remains uncertain.
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