Oil prices rose slightly on Monday amid growing concerns about potential supply disruptions from the Middle East following Israel’s intensified attacks on Iranian-backed forces.
Brent crude futures for November delivery climbed by 16 cents, or 0.22%, reaching $72.14 a barrel as of 0043 GMT. This contract expires on Monday, while the more actively traded December contract saw an increase of 10 cents, or 0.14%, to $71.64. Meanwhile, U.S. West Texas Intermediate crude futures rose by 8 cents, or 0.12%, to $68.26 a barrel.
Rising concerns due to conflict in the Middle East
Last week, Brent crude prices declined by about 3%, and WTI dropped around 5% due to rising concerns over demand after China’s fiscal stimulus, the world’s second-largest economy and top oil importer, failed to bolster market confidence.
However, on Monday, prices were buoyed by fears of a broader conflict in the Middle East involving Iran, a significant oil producer and OPEC member, following Israel’s escalation against the militant groups Hezbollah and the Houthis, which Iran supports.
Chances of Iran becoming directly involved in the conflict
ANZ Research noted that the recent uptick in attacks heightens the chances of Iran becoming directly involved in the conflict, posing substantial risks to supply disruptions from OPEC.
Israel confirmed it targeted Houthi positions in Yemen on Sunday, further escalating its confrontation with Iran’s allies just two days after the killing of Hezbollah leader Sayyed Hassan Nasrallah, which has intensified tensions in Lebanon.
Read More: Fresh Israeli Strikes Kill Nearly 50 More, Says Lebanon’s Health Ministry
Austin gives military green light to strengthen presence in Middle East
U.S. Defense Secretary Lloyd Austin has given the military the green light to strengthen its presence in the Middle East. The Pentagon stated that if Iran, its allies, or proxies threaten U.S. personnel or interests, Washington would take all necessary measures to protect its people.
Later on Monday, market participants will look to Federal Reserve Chair Jerome Powell for insights into the pace of monetary policy easing, with seven other Fed officials scheduled to speak this week, as highlighted by ANZ.
Despite the upward pressure on prices, they remain vulnerable, as OPEC and its allies, known as OPEC+, plan to increase output by 180,000 barrels per day in December, and oil exports from Libya are also expected to resume.
Also Read: Israel Used US-Made 2,000-Pound Bombs To Kill Hezbollah Leader Hassan Nasrallah
