Oil prices drop to 7‑month low amid rising Middle East tensions
Oil prices on the New York Mercantile Exchange are at their lowest level in seven months. Investors are assessing the situation in the Middle East and anticipating a retaliatory attack by Iran on Israel after the killing of Hezbollah and Hamas representatives last week, brokers report.
10:54 AM EDT, August 5, 2024
A barrel of West Texas Intermediate oil for September delivery costs $72.88 on NYMEX in New York, down 0.87%. Brent on ICE for October is priced at $76.22 a barrel, down 0.77%.
Investors are preparing for a possible attack on Israel by Iran and its allies in retaliation for the killing of Hezbollah and Hamas representatives.
In Iran, as part of the investigation into the killing of Palestinian Hamas leader Ismail Haniyeh, more than 20 people have been detained, according to anonymous sources.
Among the detainees are high-ranking intelligence and military officers responsible for the defense of Tehran. Workers at the building where Haniyeh was staying have also been detained.
Investigators have confiscated all the detainees' electronic devices. Surveillance recordings at Iranian airports are also being analyzed. According to investigators, suspects in the killing of the Hamas leader are in Iran.
Attack on Haniyeh
Haniyeh died on July 30 as a result of a bomb explosion in the room where he was staying after arriving in Tehran for the inauguration of the Iranian president. The charge was reportedly planted two months earlier.
The Islamic Revolutionary Guard Corps stated that an Israeli missile killed Haniyeh. Israel has not admitted to killing the political leader of Hamas.
Earlier, Hezbollah military commander Fuad Shukr was killed, and Hezbollah leader Hassan Nasrallah indicated that Hezbollah's war with Israel has entered a new phase.
By killing our military commander Fuad Shukr, Israel crossed a red line and should expect rage and revenge, Nasrallah said last week.
Shukr, also known as Hajj Mohsin, was a close adviser to Hezbollah leader Hassan Nasrallah.
According to the Israeli military, Shukr was responsible for many deadly attacks on Israel.
The US accused him of being involved in the planning and execution of the 1983 bombing of American soldiers' barracks in Beirut. The attack killed 241 American and 58 French soldiers.
Serious risks
"While there are growing demand concerns, geopolitical risks continue to hang over the oil market," Warren Patterson, head of commodities strategy at ING Groep NV in Singapore, assessed in a market note.
He added that escalating tensions in the Middle East could lead to short-term volatility in fuel markets. Still, an actual disruption of oil supplies from that region would cause sustained upward pressure on prices.
US Secretary of State Antony Blinken told his G-7 counterparts on Sunday that an attack on Israel by Iran and Hezbollah could begin as early as Monday, Axios reported, citing several anonymous sources close to the matter.
Blinken reportedly said that the US does not know the exact attack timing, but it is expected to start within the next 24-48 hours.
