Global oil prices rising amid fears of potential Iranian attack on Israel
Photo: Oil market roils ahead of potential Iranian attack on Israel (Getty Images)
On Thursday, October 31, oil prices rose by $2 per barrel on global exchanges. This increase followed reports that Iran is preparing to attack Israel from Iraqi territory in the coming days, according to Reuters.
WTI crude oil futures jumped by $2.15, or 3.13%, reaching $70.76 after trading closed at 3:22 p.m. EDT, while Brent futures for January increased by $2.10, or 2.91%, to $74.26.
At the same time, Brent crude futures rose by 61 cents, or 0.84%, to $73.16 per barrel. Trading for Brent futures for December concluded on Thursday, with the more active January contract settling at $72.81.
WTI crude futures climbed by 65 cents, or 0.95%, to $69.26.
Impact of war and political factors
Reuters noted that Iran is an OPEC member and produces about 3.2 million barrels of oil per day, accounting for 3% of global output.
The week began with significant sell-offs: Brent and WTI crude futures fell by more than 6% on Monday, October 28. This decline occurred after Israel exhibited some restraint in its retaliation strike against Iran over the weekend.
The possibility that OPEC+ might delay a planned increase in oil production also supported prices on Thursday, October 31.
Reuters said a decision could be made as early as next week. An OPEC+ meeting is scheduled for December 1 to decide on further policy actions.
China, the world’s largest oil importer, increased its oil production in October for the first time in six months, indicating that stimulus measures are having an effect.
"Several international events have converged at the turn of the month that could see oil markets in for a bumpy ride in early November," said Rystad Energy's Sahdev.
He particularly referred to the upcoming US election, ongoing demand decline in China, uncertainty within OPEC+, and the conflict in the Middle East.
Risk of Iranian attack on Israel
According to Israeli intelligence, Iran is preparing to attack Israel from Iraqi territory in the coming days. There is speculation that this may occur just before the US presidential election on November 5.
The attack is expected to be carried out by Iranian-aligned groups from Iraqi territory using a large number of drones and ballistic missiles. This tactic is purportedly intended to prevent Tehran from suffering another Israeli strike on strategic sites in Iran.
“This is putting back on the table the possibility that Israel may give an attack on Iran another go,” said Phil Flynn, senior analyst at Price Futures Group
He cautioned that in the event of a new strike, Iran's oil infrastructure may not remain beyond the reach of attack.
Israeli strikes on Iranian targets
On Saturday, October 26, the Israel Defense Forces struck military facilities in Iran with ballistic missiles. This was a retaliation for a large-scale attack on Israeli territory by Iran on October 1.
Specifically, the IDF targeted secret bases in the suburbs of Tehran.
Israeli forces also destroyed all Russian air defense systems covering Iranian airspace.
However, Israel did not target oil production and processing facilities or Iran's nuclear sites.
