As Israel prepares a response to Iran's attack, the oil market reacts and sees an even hotter geopolitical scenario
Get ready, because the price of Oil is on a roller coaster and if it depends on the loss between Israel and Iran , there is still a long way to go. This Thursday, October 10, the price of a barrel rose almost 4% with the markets on high alert. The reason? A possible retaliation from Israel to the recent ballistic missile attack from Iran . It sounds like the plot of an action movie, but it is pure reality, and investors are watching every move.
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This Thursday, the Oil WTI for November rose 3,56% to close at $75,85 a barrel, while Brent for December rose 3,68% to $79,40. The price jump came on the heels of news that the Office of the Security Council Israel will 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 was not left behind.
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Israel and Iran: Maximum Tension in the Oil Market
CNN reported that the government of Israel should decide its response to the attack later today. And that response may not be light at all. With the Israeli military downplaying the fact that an action “robust” is at stake, the global market for oil armed himself for impact. And that's not all: as if the direct debate between Israel and Iran , the Russian president Vladimir Putin also got involved in the discussions, meeting with the Iranian leader Masoud Pezeshkian to try to defuse the mood — or perhaps just increase the complexity of the geopolitical scenario.
With so many factors at play, it is no surprise that the market is responding with nervousness on the surface. The risk of a military escalation that directly affects the production and export of Oil do Iran is huge, and any disruption in this case could create a knock-on effect on the global price of a barrel.
Global Risk and the Future of Oil
According to Fitch Ratings, geopolitical risk, which has been relatively controlled throughout the year, is now on investors' radar. A possible Israeli attack on Iran's strategic infrastructure — such as transportation, storage and production areas — could be a potential threat to Iran's economy. oil — could significantly affect the country's export capacity. This is not only threatening global supply, but could also push the price of a barrel to the low US$90 by 2025 .
Warren Patterson, a strategist at ING bank, got straight to the point: “Where prices will go from here will depend on what happens in Israel.” If the infrastructures of the Iran are affected, the impact on the market will be severe, further increasing the price of Oil . You can already feel the atmosphere of apprehension, can't you?
And to add fuel to the fire, the increase in fuel consumption in the US, due to Hurricane Milton passing through Florida, is adding new pressure to the price of the commodity. The scenario is chaotic, and the only certainty is that, from now on, every movement of Israel and Iran will be crucial in setting the price of Oil In the next months.
What lays ahead?
The big question remains: how far will this rise go? Oil ? Will the barrel really reach the US$ 90 as many predict? With Israel and Iran involved in a possible direct conflict, the repercussions will be felt around the world, from major savings to the price of fuel at the gas station on the corner.
And you, what do you think? How can this increase in the price of oil affect our daily lives? Will the barrel reach US$ 90 or will everything go to hell? Leave your opinion in the comments!
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