Following Iran's missile attack on Israel on Tuesday, the world is awaiting the promised response from the Israeli government. This escalation has led to a significant spike in oil prices, with Brent crude closing above $80 for the first time in a month and a half.
On Monday, Brent North Sea crude for December delivery rose sharply by 3.69% to $80.93, marking its highest level since August. Meanwhile, West Texas Intermediate (WTI) for November gained 3.71%, reaching $77.14. Phil Flynn from Price Futures Group described it as 'another big day for oil,' attributing the market's direction to a 'double risk': the potential Israeli attack on Iranian oil facilities and the impending impact of Hurricane Milton in the Gulf of Mexico.
According to TankerTrackers, the Iranian National Tanker Company has moved oil tankers away from the coast while awaiting cargo near Kharg Island, which hosts Iran's largest crude export terminal. Analysts from Eurasia Group noted that Iranian authorities appear to be preparing for a potential Israeli strike on oil sites.
Commodity Research Group's Andrew Lebow mentioned that following the Iranian attack, speculative traders who had bet on falling prices began buying to hedge against potential losses from rising crude prices. Analysts at Goldman Sachs predict that if the market loses all or part of Iranian production, Brent prices could soar to $90. However, Lebow warns that prices could also fall if no further developments occur in the coming days, as the current momentum is based on a pessimistic scenario.
Additionally, traders are closely monitoring Hurricane Milton, which is currently a Category 5 storm making its way through the southern Gulf of Mexico towards Florida, with winds exceeding 280 km/h. Flynn anticipates that companies will likely take precautions ahead of the hurricane's landfall, which will impact transportation volumes. U.S. meteorological services expect Milton to lose intensity but grow in size before making landfall in Florida on Wednesday.