On October 4, 2024, escalating tensions between Israel and Iran have led to a significant surge in oil prices, with Brent crude rising by 5% to reach levels not seen in a year. The concerns over a potential Israeli attack on Iranian oil facilities have prompted market fluctuations.
Brent crude was reported at approximately $78 per barrel following news that U.S. President Joe Biden is weighing support for Israeli strikes on Iran's energy infrastructure. Meanwhile, U.S. crude remains steady at around $74.
This week, the possibility of disruptions in oil supply from the Middle East has driven prices up by 8%, marking the highest levels in recent years. Vishnu Varathan, head of Asia economics and strategy at Mizuho Bank in Singapore, noted that despite the rising prices, the market has not fully priced in the potential for a comprehensive war.
The tensions have escalated due to Iran's threats to send troops to Southern Lebanon and missile attacks targeting Israel, as a response to increased Israeli operations against Hezbollah. The G-7 countries have urged regional actors to act responsibly and with restraint.
The Middle East accounts for about one-third of the world's oil supply. According to Citigroup Inc., a large-scale Israeli attack on Iran's export capacity could result in a loss of 1.5 million barrels per day from global oil supply.