U.S. crude oil prices surged over 3% on Monday amidst growing anticipation of a potential Israeli strike on Iran’s oil industry. Last week, oil prices soared on fears of retaliation by Israel following Iran’s ballistic missile attack.
The U.S. benchmark West Texas Intermediate saw a remarkable 9.09% increase last week, marking the largest weekly gain since March 2023. Similarly, the global benchmark Brent rose by 8.43%, the biggest weekly advance since January 2023.
As of 11:50 a.m. ET on Monday, energy prices stood as follows:
– West Texas Intermediate November contract: $76.96 per barrel, up by $2.58 or 3.47%.
– Brent December contract: $80.62 per barrel, up by $2.57 or 3.29%.
– RBOB Gasoline November contract: $2.161 per gallon, up by 3.11%.
– Natural Gas November contract: $2.746 per thousand cubic feet, down by 3.78%.
President Joe Biden has discouraged Israel from targeting Iranian oil facilities, citing concerns about the potential impact on global oil prices. The uncertainty surrounding Israel’s retaliatory actions has left the market on edge, with analysts speculating on potential scenarios.
Helima Croft, head of global commodity strategy at RBC Capital Markets, emphasized the significance of a potential strike on Kharg Island, a crucial hub for Iran’s crude exports. The possibility of a regional conflict looms large, with the Strait of Hormuz potentially becoming a focal point for heightened tensions.
Alan Gelder, vice president of oil markets at Wood Mackenzie, highlighted the worst-case scenario of a disruption in the Strait of Hormuz, which could have catastrophic consequences on global crude prices. The market remains wary of the unfolding situation and its potential implications on the energy sector.
As the world watches and waits for further developments, the uncertainty surrounding Israel’s next move continues to drive volatility in oil markets. The geopolitical dynamics at play underscore the fragility of the current situation and the potential ripple effects on energy prices globally.
Stay tuned for more updates as the situation unfolds, and be prepared for potential shifts in energy markets in the days to come.
