Crude oil prices witness 10% increase in global market

Moscow: Various countries of the world are worried about the effects of the ongoing conflict between Israel and the Palestinian movement Hamas in the Gaza Strip, on the global supply of oil and gas and its prices.

According to the report of British Broadcasting Corporation, as a result of the conflict that started after the attack of Hamas on Israel on October 07, the prices of oil have increased slightly at the global level.

Since the start of the conflict, the price of European Brent crude has increased by about 10 percent, while the price of US Brent crude has increased by about 9%. The price of Brent crude oil in the world market is around 90 dollars per barrel.

Industry experts have warned that if the dispute continues and escalates, the supply of petroleum products could be disrupted and global prices could rise.

Fatah Birol, the head of the International Energy Agency, said the war in Gaza was ‘not good news’ for already stressed oil markets. He added that regardless of this dispute, Saudi Arabia and Russia have already announced a reduction in oil production, while the demand for oil in China is increasing.

“Israel is not an oil producer, and there is no major oil infrastructure in the vicinity of the Gaza Strip,” says oil sector analyst Eduardo Campanella.

However, a significant risk is Iran's direct intervention in the conflict. Iran openly supports Hamas in this conflict and calls Israel 'the biggest enemy of the Muslim world'.

The Middle East region controls about one-third of the world's total oil supply, and about 20 percent of global oil flows through the Strait of Hormuz.

According to oil sector experts, the current Gaza-Israel conflict is considered to be the biggest threat to the global energy market since the start of the Russian war against Ukraine in February 2022. Experts fear that if the conflict spreads to countries like Iran and Saudi Arabia, there will be repercussions, especially if Iran closes the Strait of Hormuz to oil supplies.

Eduardo Campanella stated that among the countries in the Middle East region, only Saudi Arabia and the United Arab Emirates (UAE) have pipelines available to deliver crude oil from the Gulf to European countries without passing through the Strait of Hormuz.

According to the expert, although the United States and Israel have not found evidence that Iran is involved in this matter, if a link is established between Iran and Hamas, it will result in more US sanctions on Iran. It can and will be a situation that will increase the pressure on the global oil market.

A deal brokered by Washington to normalize relations between Saudi Arabia and Israel was also something that could have led to an increase in oil production by Saudi Arabia, but this deal was also suspended due to the Gaza-Israel conflict.