In the wake of Iran’s most significant military assault on Israel, oil prices jumped by more than a dollar in early trade today due to mounting worries that rising tensions in the Middle East could impede crude supply.
As of 03:30 GMT, U.S. West Texas Intermediate (WTI) crude climbed by $1.07, or 1.53%, to $70.90, while Brent futures jumped by $1, or 1.36%, to $74.56 per barrel. Both benchmarks experienced trade advances of more than 5% on Tuesday.
Following Iran’s Tuesday ballistic missile launch at Israel in retaliation for Israel’s military actions against Tehran’s allies in Lebanon, Hezbollah, oil prices increased by almost 3%. Brent futures advanced by $1.86, or 2.6%, closing at $73.56 per barrel, while U.S. West Texas Intermediate (WTI) oil climbed $1.66, or 2.4%, to settle at $69.83. Both benchmarks had increased by more than 5% earlier in the day.
Israelis fled to bomb bunkers in fear as alarms went off around the country and explosions were audible in Jerusalem and the Jordan River valley.
Israel And Iran’s Clash
Iran claimed that the strikes were in reprisal for attacks on Lebanon and Gaza, as well as the recent killings of leaders of the Islamic Revolutionary Guard Corps (IRGC), Hezbollah, and Hamas. Additionally, the nation forbade Israel from taking any kind of reprisal.
Following Iran’s firing of a volley of ballistic missiles aimed at important military and security locations in Israel, Israeli officials have pledged to strike back.
Disruptions In Global Energy Supply
Because Iran is a member of OPEC, its direct engagement in the conflict raises the possibility of disruptions to the oil supply. In August, the nation’s oil production hit a six-year high of 3.7 million barrels per day, or almost 4% of the world’s total.
Later on Wednesday, a panel of ministers from OPEC and its partners, or OPEC+, is slated to convene to assess the market; no changes to policy are anticipated. Russia is a member of OPEC+, an organization that intends to boost output by 180,000 barrels per day (bpd) every month starting in December.
In light of the Middle East issue, South Korean President Yoon Suk-yeol voiced concerns over the nation’s energy supplies. According to his office, Yoon met with experts on national security and economic matters on Wednesday and advocated for a prompt but cautious response to any possible effects the conflict would have on South Korea’s energy supplies.
Nigeria’s Double-Edged Sword
Nigeria’s economic situation will benefit from rising oil prices, which indicate higher government revenue and possible growth in the nation’s foreign reserves.
However, higher crude oil prices would translate to higher petrol prices, which could be devastating to Nigerians who are already dealing with record-breaking high petrol prices of over N1,000 per litre in major cities across the nation. This is because the NNPC intends to fully transition into a cost-reflective petrol market era.
