Oil Prices Surge Amidst Middle East Tensions and US Sanctions
Oil Markets Experience Volatility
Investing.com – The oil markets have been anything but predictable. According to oil services firm Panther, there is never a dull moment in the oilfield. The markets are constantly filled with drama, with prices fluctuating day by day and even hour by hour.
White House Imposes Sanctions on Russia
Friday was one such eventful day in the oil markets. Crude prices experienced a 5% surge, maintaining heightened nerves throughout the week. This surge was sparked by the White House’s announcement of sanctions on companies that aid Russia in selling oil above the $60 per barrel cap set by the United States and its allies.
Tensions Rise in the Middle East
Amidst the ongoing volatility, the market faced a sudden drop due to Palestine militant group Hamas’ attacks on Israel, igniting a new conflict in the Middle East. This, combined with the largest US crude build since February and record production levels, caused prices to plummet.
Price Rebound and Emerging Concerns
However, prices quickly rebounded due to Russia’s breach of the G7 price cap on oil and Iran’s eagerness to join the Middle East conflict. These factors heightened concerns in the already tight oil market, influencing the decision-making of oil traders.
Iran’s Support for Hamas
The recent market fluctuations seem to be correlated with Iran’s statements supporting Hamas and their warning that a “new front” may open if Israel’s alleged war crimes continue. Oil futures broker and commentator, Scott Sheffield, suggests that while the media blames tighter sanctions, Iran’s involvement plays a significant role.
Surge in Oil Prices
With an hour left until settlement, New York-traded crude for November delivery saw a $4.17 increase, reaching $87.08 per barrel, representing a 5% surge. London-traded crude for the most-active December contract experienced a similar rise of $4.27, reaching $86 per barrel. The global crude benchmark briefly surpassed the coveted $90-per-barrel mark, favored by oil bulls.
(Peter Nurse contributed to this article)
