13 April 2024 – Fears of Possible Interruptions to Supply Have Caused Oil Prices to climb 1% on Friday because of geopolitical tensions in the Middle East. Although U.S. West Texas Intermediate crude had a weekly loss, it recovered to $85.66 after the International Energy Agency (IEA) released a negative estimate for global oil demand growth and concerns about slower U.S. interest rate reductions. Brent crude ended the week at $90.45 per barrel.
A purported Israeli warplane strike on Iran’s embassy in Damascus is the cause of the current tensions, which has sparked worries of Iranian reprisal. Andrew Lipow, head of Lipow Oil Associates, said, “The market’s main focus is on whether Iran will retaliate against Israel,” underscoring the concern that events in the Middle East may disrupt supply and drive up prices.
Iranian sources have suggested a reaction meant to prevent a significant escalation, even if the United States anticipates a strike by Iran against Israel.
Conclusion
Although Iran continues to threaten to close the Suez Canal, supply chain problems are still a worry, according to Tim Snyder, an economist with Matador Economics. The war has a big effect on the world’s oil markets since any interruption in supply might result in higher prices.
