Oil prices continued their upward trajectory on Monday, with Brent crude nearing the $80 mark, fueled by escalating concerns over a potential wider conflict in the Middle East and possible disruptions to oil exports from this critical region. By 1316 GMT, Brent crude futures had climbed $1.09, or 1.4%, reaching $79.14 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose $1.15, or 1.55%, to $75.53, having previously surged by more than $2. This follows a significant increase last week, marking the steepest weekly gain since early 2023, as market players reacted to the geopolitical tensions.
Market analysts are closely monitoring the situation, particularly the implications of a potential Zionist response to Iran’s missile attack on October 1. Ole Hansen, head of commodity strategy at Saxo Bank, noted that the options market is seeing heightened demand for hedging against further price increases due to fears of supply disruptions. Brent crude experienced an over 8% rise last week, while WTI soared by 9.1%, as speculation grew that the Zionist entity might target Iranian oil infrastructure. Tensions escalated further when rockets fired by Iran-backed Hezbollah struck Haifa, and with the Zionist intensification of the ground operations in southern Lebanon, the prospect of broader conflict looms large.
Despite the tensions, ANZ Research suggested that any immediate impact on oil supply would likely be limited. They assessed a direct attack on Iran’s oil facilities, citing OPEC’s significant spare capacity of 7 million barrels per day. As OPEC+ plans to begin increasing production from December after recent cuts, they have sufficient resources to counterbalance potential losses from Iranian supply disruptions.
