After an initial fall in price on Monday, oil price rose by more than $2 a barrel yesterday, with Brent Crude hitting $80.74 per barrel mark and West Teas Intermediate (WTI) rising to $77.76 per barrel. The rise was spiked by the killing of Hamas political leader, Ismail Haniyeh, in an early morning air strike in Tehran, Iran. Both WTI and Brent had been falling consistently for a month, hitting 7-week lows on Tuesday even after the Hezbollah rocket attack on the Golan Heights.
This is why investors are closely watching conflicts in the Middle East for signs because escalating hostilities between Israel and Iran could threaten global oil supplies and drive up energy prices. More than half of all crude oil reserves are in the region, according to current estimates from the Organisation of Petroleum Exporting Countries (OPEC).
Reuters, in a report, quoted that an oil analyst thus: “Overnight developments and elevated geopolitical risk merely provide temporary reprieve for oil benchmarks. Unless oil and gas infrastructure is hit, the latest spike is unlikely to last,” said Gaurav Sharma, an independent oil analyst in London.
