Crude oil analysts are in a rush to revise their forecasts in the wake of Israel’s attacks on Iran as geopolitics trumps fundamentals yet again.
“Oil could spike toward $80 if Middle East tensions escalate and supply risks materialize, but rising OPEC+ output may cap gains and revive oversupply concerns into autumn,” Saxo Markets chief investment strategist Charu Chanana said, as quoted by Bloomberg.
Crude oil prices rose sharply earlier today following reports on Tuesday that Israel had plans to attack Iranian nuclear facilities.
At the time of writing, Brent crude was trading at $66.37 per barrel, with West Texas Intermediate at $62.56 per barrel, after CNN reported late on Tuesday that new intelligence obtained by the U.S. suggested the Israeli government was considering strikes on Iranian nuclear sites.
A consortium of Azeri state company Socar, BP Plc and Israel’s NewMed Energy LP will get the right to explore in one offshore block, in a signing overseen by Azerbaijan Economy Minister Mikayil Jabbarov and Israeli Energy Minister Eli Cohen, according to the Israeli energy ministry. The agreement gives Socar another foothold in important Israeli assets after the company bought a 10% stake in the Tamar gas field earlier this year.
Israel exported a record 981mn cfd of natural gas to Egypt in 2024, good for 18.2% year-over-year. According to Middle East Oil & Gas publication MEES, the remarkable surge in imports can be attributed to a growing gas deficit resulting from declining domestic production by Egypt. However, Israel will struggle to ramp up exports further due to infrastructure limitations.
Energean plc has reported production of 156,000 barrels of oil equivalent per day (boepd), a 31 percent increase year over year, for the nine-month period ended September 30.
Brent crude futures rose 21 cents, or 0.3%, to US$83.54 a barrel by 0810 GMT while U.S. West Texas Intermediate (WTI) crude futures were up 1 cent at US$78.49
Crude oil prices began the week with a loss as fears of an escalation between Iran and Israel dissipated.
Israel withdrew forces from the southern Gaza city of Khan Younis over the weekend, bringing its troop levels in the enclave to one of the lowest levels since the war with Hamas began last October.
U.S. crude and Brent gained more than 4% last week as tensions mounted between Israel and Iran.
The geopolitical conflicts that have engulfed the world are making many believe that oil prices can hit the global benchmark of $100 for the first time in almost two years
Oil prices are likely to remain at current highs as geopolitical risk factors increase, but the next significant price jump would likely come if Israel attacks Iran’s energy facilities, said Greg Sharenow, head of the commodity portfolio management group at Pacific Investment Management Co LLC.