LONDON: Tuesday saw an approximate 4% increase in oil prices as a result of rumors that Iran was getting ready to attack Israel with missiles.
By 11:50 a.m. EDT (1550 GMT), Brent futures had increased $2.50, or 3.5pc, to $74.20 a barrel, while US West Texas Intermediate (WTI) crude had increased $2.54, or 3.7pc, to $70.71.
The US warned that it had information suggesting Iran might be getting ready to join the conflict by attacking Israel with ballistic missiles, and Israel’s elite forces conducted limited ground assaults into Lebanon while Hezbollah, a group supported by Iran in Lebanon, fired missiles at Tel Aviv.
Following weeks of intense Israeli airstrikes on Lebanon, there was a tit-for-tat escalation that sparked fears of a wider Middle East conflict that would affect both Iran and the US.
“An assault on Israel at this time would be a grave error for Iran. Jerusalem has no qualms about expanding its military campaign to take direct aim at Iran. Furthermore, Iran’s oil resources are probably high on the list of targets, according to an email from independent political risk strategist Clay Seigle.
According to Seigle, an Israeli strike on Iranian oil export or production facilities may potentially affect more than a million barrels of oil production every day.
The oil market was trading near a two-week low prior to reports of a potential missile attack from Iran, as expectations for higher supply and modest rise in global demand overcame concerns about the conflict in the Middle East intensifying and how it would affect the region’s petroleum exports.
A panel of ministers from the Opec+ producer group meets on Oct 2 to analyze the market, with no policy changes expected.
