Oil prices surged by more than $4 per barrel during early Asian trading on Monday, driven by escalating military clashes between Israeli and Hamas forces, causing heightened political uncertainty in the Middle East.
Brent crude rose by 4.94 percent, reaching $88.76 per barrel, while U.S. West Texas Intermediate crude increased by 5.11 percent, reaching $87.02 per barrel.
This abrupt price increase marked a reversal of the recent downward trend triggered by concerns about high global interest rates impacting demand.
Read also:Oil prices drop over 2% amid demand concerns
Over the weekend, Palestinian Islamist group Hamas launched its most significant military assault on Israel in decades, resulting in hundreds of casualties and a series of retaliatory Israeli air strikes on Gaza.
The ongoing violence could potentially disrupt U.S. efforts to mediate a Saudi-Israeli reconciliation, posing risks to oil supplies.
Reuters had earlier reported that Saudi officials had reportedly informed the White House of their willingness to increase oil production next year as part of a proposed deal with Israel.
Read also: NUPRC taps advanced cargo declaration to tackle oil theft
Such an increase could alleviate the tight supply conditions resulting from months of production cuts by key producers Saudi Arabia and Russia.
The normalisation of Saudi-Israeli relations could also impact the recent attempts at détente between Saudi Arabia and Iran.
Market attention has now shifted to the possibility of Iranian involvement in the attacks, adding further complexity to the situation.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
