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As Israel Prepares A Response To Iran’s Attack, Oil Market Reacts And Sees Even Hotter Geopolitical Scenario
Get ready, because the price of Oil is on a roller coaster, and if the losses between Israel and Iran are any indication, there’s still a lot more climbing ahead. This Thursday, October 10, the price of a barrel rose nearly 4% with markets on high alert. The reason? A possible retaliation from Israel to the recent ballistic missile attack coming from Iran. It sounds like an action movie plot, but it’s pure reality, and investors are watching every move.
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On this Thursday, WTI Oil for November registered a high of 3.56%, closing at $75.85 a barrel, while Brent for December rose 3.68%, reaching $79.40. This price jump occurred right after news that the Israeli security cabinet would vote today to decide the response to the Iranian attack, which already has the support of senior Israeli military officials. Tension is in the air, and the market didn’t lag behind.
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Israel And Iran: Maximum Tension In The Oil Market
CNN reported that the government of Israel is expected to decide its response to the attack today. And this response may not be light. With Israeli military officials hinting that a “robust” action is at stake, the global oil market has prepared for the impact. And that’s not all: as if the direct debate between Israel and Iran wasn’t enough, Russian President Vladimir Putin also got involved in the discussions, meeting with Iranian leader Masoud Pezeshkian to try to ease tensions — or perhaps just increase the complexity of the geopolitical scenario.
With so many factors at play, it’s no surprise that the market is responding with heightened nerves. The risk of a military escalation that directly affects Iran’s oil production and export is enormous, and any disruption in this case could create a domino effect on the global barrel price.
Global Risk And The Future Of Oil
According to Fitch Ratings, geopolitical risk, which has been relatively controlled throughout the year, is now in the spotlight for investors. A potential Israeli attack on Iranian strategic infrastructures — such as transportation, storage, and oil production areas — could significantly affect the country’s export capacity. This is not only threatening to global supply but could also push the barrel price to the $90 by 2025.
Warren Patterson, an ING bank strategist, got straight to the point: “The rumor that prices will rise from here depends on what Israel does.” If Iran’s infrastructures are affected, the impact on the market will be severe, further driving up Oil prices. You can already feel the air of apprehension, can’t you?
And to add more fuel to this fire, the increase in fuel usage in the US, due to Hurricane Milton passing through Florida, is adding new pressure on the commodity price. The scenario is chaotic, and the only certainty is that from now on, every move by Israel and Iran will be crucial in defining the price of Oil in the coming months.
What’s Ahead?
The big question is: how high will this Oil price go? Will the barrel really reach $90 as many predict? With Israel and Iran involved in a potential direct conflict, the repercussions will be felt worldwide, from major economies to fuel prices at the corner gas station.
And you, what do you think? How can this increase in oil prices affect our daily lives? Will the barrel hit $90 or will everything be fine? Leave your opinion in the comments!
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