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Oil prices on second weekly gains amid tensions in Middle East  

Oil prices were headed for a second weekly rise due to geopolitical tensions in the Middle East, concerns about a tightening supply, and forecasts of growing demand as economies strengthen. A barrel of Brent crude was trading for nearly $91 by midday. West Texas Intermediate crude closed at $86.5 a barrel on Thursday, the highest price since October for both benchmarks.  

OPEC’s third-largest producer, Iran, promised retaliation against Israel for an attack that killed high-ranking Iranian military men. Brent crude and WTI are expected to rise by more than 4% this week, marking their second consecutive week of gains.  

 

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This year, oil prices have surged, recording gains in three straight months. U.S. crude has increased by about 21%, while Brent crude increased by 18%. Geopolitical tensions in the Middle East and Eastern Europe in addition to a tightening global crude market, have propelled the increase.  

Israeli embassies were reportedly placed on high alert following Iran’s threat of retaliation for hitting its consulate in Damascus with missiles earlier this week, according to media reports.   

The Times of Israel reports that the Israel Defense Forces have terminated combat troops’ home leave due to an intensifying conflict with Tehran.  

Additionally, President Biden forewarned Israel’s Benjamin Netanyahu on Thursday that the humanitarian situation in Gaza and strikes against aid workers are “unacceptable.”. Informing Netanyahu that U.S. s. Israel’s response to the humanitarian crisis in Gaza will dictate its policy regarding the conflict.  

Fears of a Middle East conflict that might restrict oil supplies have returned due to the increasing tensions between Israel and Iran, two members of OPEC. However, the major factor influencing pricing, according to Again Capital founder partner John Kilduff, is the drone strikes carried out by Ukraine against Russian oil facilities. 

 

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ABOUT THE AUTHOR See More
Olumide Adesina
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.
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