NewsOil prices soar as Middle East tensions escalate, hitting 5-month high
Oil prices soar as Middle East tensions escalate, hitting 5‑month high
7:31 PM EDT, April 9, 2024
Oil prices on the New York fuel exchange continue to rise, approaching a five-month peak. Brokers say the increase is driven by escalating tensions in the Middle East and persistent supply issues.
On Tuesday, April 9, a barrel of West Texas Intermediate for May delivery edged up by 0.13% to $86.54. Concurrently, Brent crude for June delivery saw a 0.18% increase, reaching $90.54. This uptick followed a notable price drop on Monday when the commodity shed nearly 1%—its first decline in five sessions, as "Puls Biznesu" reports.
Brokers attribute the ongoing price hikes to the intensifying situation in the Middle East, particularly pointing to the war in the Gaza Strip that has raged since Hamas' terrorist attack on Israel in October 2023. This marks the latest and most violent chapter in the over 70-year-long conflict between Israelis and Palestinians.
"Puls Biznesu" highlights the potential for the conflict to escalate further, potentially affecting the wider region—a critical concern given that the Middle East is responsible for one-third of the world's oil supplies.
The market reacts to increased geopolitical risks
Israeli Prime Minister Benjamin Netanyahu recently stated that Israel would not consider a ceasefire until the release of all hostages held by Hamas, currently numbering around 120.
Despite mounting international pressure, including from the United States, Netanyahu's far-right government has refused to comply with what it sees as "extreme" demands from Hamas.
Brokers also note that oil markets are bracing for Iran's potential response following allegations of an Israeli strike on the Iranian consulate in Syria last week. This concern is heightened by Hezbollah's warning that it stands ready for war.
Analysts at Goldman Sachs Group Inc. summarize the situation, noting, "The market is pricing in increased geopolitical risk," highlighting the delicate balance of global oil markets amidst regional tensions.
