• Saturday, October 05, 2024
businessday logo

BusinessDay

Oil jumps as Middle -East tensions ignite supply fears

Oil jumps as middle east tensions ignite supply fears

Crude prices are seeing a sharp rise today, with WTI trading at $68.52 per barrel, up 1.26 percent, and Brent Crude at $72.27 per barrel, up 0.94 percent.

These gains are driven primarily by escalating tensions in the Middle East, particularly the intensifying conflict between Israel and Hezbollah.

This volatility is prompting fears of further disruptions to oil supply and maritime routes.

Israel recently launched an airstrike targeting Hezbollah’s central headquarters in Beirut, marking the heaviest attack in almost a year of ongoing conflict.

Read also: Oil ends more than 1% higher on US rate cut, declining crude stockpiles

Although the fate of targeted Hezbollah leader Hassan Nasrallah is unconfirmed, the strikes have heightened geopolitical concerns. With Hezbollah retaliating through rocket fire and maritime security warnings issued for vessels in Israeli ports, the conflict poses a direct risk to regional shipping lanes.

The Houthis in Yemen have also increased attacks on U.S. vessels and Israeli targets, further destabilizing the area.

The growing uncertainty in the region, coupled with fears of more direct strikes on ports like Haifa and Eilat, has led to heightened risk assessments for shipping and oil transport.

Insurance premiums are expected to rise as the potential for collateral damage to Israeli and neighboring maritime infrastructure looms. Investors are responding by pushing up oil prices, anticipating supply disruptions and increased demand for secure oil reserves amid the instability.

The situation remains fluid, and continued price increases are likely if the conflict escalates further.

Dipo Oladehinde is a skilled energy analyst with experience across Nigeria's energy sector alongside relevant know-how about Nigeria’s macro economy. He provides a blend of market intelligence, financial analysis, industry insight, micro and macro-level analysis of a wide range of local and international issues as well as informed technical rudiments for policy-making and private directions.

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp