Oil prices have increased following worries that the situation in Israel and Gaza would stymie Middle Eastern production.

The international standard for crude oil, Brent, increased by $2.25 a barrel to $86.83, while prices in the US also increased.

Although neither Israel nor the Palestinian territories are oil producers, the Middle East accounts for roughly one-third of the world’s supply.

The attack by Hamas on Israel marked the greatest escalation between the two sides in recent memory.

The attacks were denounced by Western governments. A representative for the Palestinian terrorist organization Hamas told the BBC that Iran, one of the world’s major oil exporters, had directly supported the group’s decision.

Iran denied involvement in the assault at a UN Security Council meeting in New York on Sunday, Reuters reported. But Iranian President Ebrahim Raisi has expressed support for the attack.

Energy analyst Saul Kavonic told the BBC that global oil prices have risen “due to the prospect of a wider conflagration that could spread to nearby major oil-producing nations such as Iran and Saudi Arabia”.

The benchmark price for US crude, West Texas Intermediate, was up $2.50 a barrel at $85.30 on Monday morning.
“If the conflict envelops Iran, which has been accused of supporting the Hamas attacks, up to 3% of global oil supply is at risk,” Mr. Kavonic stated.

Investments into US Treasury bonds and the dollar, which investors typically buy during times of crisis, may also be influenced by uncertainty over how events may unfold in the ensuing days, according to James Cheo from HSBC bank.

By gvoice

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