Analysts expect a surge in oil prices at the start of the trading week following Iran’s drone and missile attack on Israel on Saturday.
This significant escalation, in retaliation for what Iran suspected was an Israeli attack on the Iranian consulate in Syria, raises concerns about a broader regional conflict that will impact global oil markets, Reuters reported.
Brent crude prices had risen to $92.18 a barrel on Friday, the highest since October, before stabilizing at $90.45. US West Texas Intermediate futures closed at $85.66. There are no exchanges on Sundays.
Second Tamas Varga from oil broker PVM, although there was no immediate impact on oil production and Iran suggested that the matter “can be considered concluded”, it said that “it is reasonable to expect stronger prices when trading resumes”.
“As violent and painful as the initial market reaction may be, the rally may prove short-lived unless supply from the region is materially disrupted,” he added.
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In response to the attack, President Joe Biden announced an upcoming meeting of Group of Seven (G7) nations to discuss a coordinated diplomatic approach.
Analysts, including from UBS Giovanni StaunovoHe stressed that the duration of any price increases depends on Israel’s reactions and whether or not G7 nations “target Iranian crude exports.”
Iran has significantly increased oil exports under the Biden administration, a point of contention given the upcoming US presidential election.
Reducing Iranian exports could lead to higher oil and gasoline prices in the United States, presenting a key issue in the election narrative.
The security of the Strait of Hormuz, a key maritime passage for global oil, also remains a focus, with recent threats from Iran to close it if necessary.
Now read: US warns of impending Iranian attacks on Israeli targets: Oil rallies, Deutsche Lufthansa blocks flights to and from Iran
This content was partially produced with the help of artificial intelligence tools and was reviewed and published by Benzinga editors.
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