Oil prices rise again due to tensions between Israelis and Palestinians

Oil prices rose as much as 5 percent after Hamas attacks on Israel, raising tensions in the Middle East, the source of about a third of the world’s crude oil.

The price of a barrel of Brent oil, which fell to $83.44 on Friday, ended the day at $84.58. The price of a barrel of Brent oil increased 3.19 percent compared to today’s close at 10:10 a.m., reaching $87.28. At the same time, West Texas Intermediate (WTI) crude oil sold at $85.72 per barrel.

It is stated that technically the range between $88.68 and $89.68 for Brent oil can be considered as resistance, and the range between $87.00 and $86.32 as support zone.

IRAN CONCERNS OVER OIL PRICES

The rise in prices was influenced by concerns that the conflicts between Israel and Hamas, which increased tensions in the Middle East, would negatively affect global oil supplies.

Following the “Aqsa Flood” attack launched from Gaza against Israel and Iran’s announcement that it was supporting Hamas in the conflict, the possibility of the United States and Western countries taking action against Iran contributed to the increase in prices.

Analysts said the potential for conflicts between Israel and Hamas to expand further kept risk perceptions high and rising oil prices could raise concerns about global inflation.

THE PASSAGE OF SHIPS FROM HORMIS MAY BE IN DANGER

Recent developments in Israel do not pose a direct threat to oil flows, but there is a risk that the conflict could escalate into a more destructive proxy war between the United States and Iran.

Any retaliation against Tehran over reports of its involvement in the attacks could jeopardize the passage of ships through the Strait of Hormuz, a vital waterway that Iran has previously threatened to close.

“A worst-case scenario, a regional war, should be considered, but that’s not my base case,” said Vandana Hari, founder of Singapore-based analytics firm Vanda Insights. “Since in a larger scale war there will only be losers, measured and calmer minds will prevail,” she said.

THE RISK OF ISRAEL’S ATTACK ON IRAN HAS INCREASED

The attacks come as tensions between the United States and Iran have been easing for months and crude oil shipments from Iran have risen to a five-year high with tacit US approval.

In an extreme scenario, if the Islamic Republic is cornered, Iran could retaliate and attack the Strait of Hormuz. Approximately 17 million barrels of crude oil are transported through the Strait of Hormuz every day.

The war between Israel and Hamas has dampened expectations that Saudi Arabia will reduce or eliminate its 1 million barrels per day production cut, while raising the risk that Israel will attack Iran, Citigroup analysts said in a note. Ed Morse and Eric Lee.

“We believe that if Israel were to emerge and directly engage Iran, it would likely be difficult for the Biden administration to continue adopting such a lenient sanctions regime,” analysts at RBC Capital Markets, including Helima Croft, said in a note.

Warren Patterson, head of commodities strategy at ING Groep NV, also stated that uncertainty may cause prices to rise, saying: “Uncertainty about how the situation will develop will likely support prices.”