Oil prices surge on Middle East supply fears
Global oil prices climbed on Friday after Israel’s invasion of Lebanon and Iran’s missile attack on Israel sparked volatility on energy markets.
The Brent benchmark gained 1.8% on Friday to $79 per barrel as of 10:43 GMT, its highest level since August 30. West Texas Intermediate (WTI) crude rose 1.3% to trade at $75.
Markets have been reacting to fears of a disruption in crude flows from the Middle East, due to the conflict. On Thursday, oil prices leapt 5% after Israel threatened to strike Iranian oil facilities in response to Tehran’s missile bombardment earlier this week.
Goldman Sachs analyst Daan Struyven told CNBC that oil prices could surge by $20 per barrel if Iranian production sees a drop of at least one million barrels per day as a result of a potential hit.
Bjarne Schieldrop, chief commodities analyst at Swedish banking group SEB, told the media outlet that oil could rally beyond $200 per barrel if energy infrastructure in the Islamic Republic is wiped out.
On Tuesday, Iran’s Islamic Revolutionary Guard Corps (IRGC) rained some 200 missiles down on Israel, calling it a retaliation for the bombardment of Gaza and Lebanon, and the recent killings of the Hamas and Hezbollah chiefs by the Israel Defense Forces (IDF).
Earlier this week, the IDF launched ground raids against Hezbollah in southern Lebanon. The Israeli military has said the operation, coupled with intense airstrikes, is aimed at stopping cross-border rocket and mortar fire by Hezbollah.
Israel’s war with Hamas erupted last October, when the militant group’s deadly incursion into southern Israel triggered a devastating IDF air and ground campaign in the Palestinian enclave. Hezbollah supports the Palestinians and has vowed that it will only stop cross-border rocket attacks when a ceasefire is reached in Gaza.
Israel’s goal is to “eliminate” Hamas completely, and it has repeatedly rejected public calls from Washington to strike a truce.
