As we move into the week, oil traders are facing a new world. Fear and uncertainty could be driving up crude oil prices with the sudden outbreak of war in Israel following Hamas’s surprise attacks. oil prices.
“The conflict poses a risk of higher oil prices, and risks to both inflation and the growth outlook,” Karim Basta chief economist at III Capital Management told Reuters.
Pierre Andurand runs a hedge fund and is an energy trader. noted Many people asked him about X on Sunday “if the Hamas attacks on Israel will have an impact on oil prices.”
Andurand is not expecting a large impact on oil He acknowledged that the global economy could be impacted by a price increase or shortage in the coming days. oil Stocks are low “and the Saudi and Russian production cuts will lead to more inventories draws over the next few months. The market will eventually have to beg for more Saudi supply, which I believe, will not happen sub $110 Brent.”
Brent crude oil is currently at a record high. priced at Around $88, jumped more than 3% Since the attacks against Israel. The U.S. Energy Information Administration published its September report in September. short-term energy outlook, writing that with Saudi Arabia’s extended production cut through year’s end, its forecast “averages $93 dollars per barrel” Prices will begin to decline next year, as inventories increase.
Of course, that was before this weekend’s eruption of violence. The agency’s next outlook is due this week.
Andurand notes that “over the last 6 months we have seen a very large increase in Iranian supply” Due to a weak enforcement of sanctions.
Iran, of course, is a big backer of Hamas, and, given that, Andurand believes there’s a “good probability” The Biden administration is expected to begin a more strict enforcement of sanctions against Iran oil exports. Exports. “further tighten the oil market,” He wrote.
“Iran remains a very big wild card,” Helima Croft is the chief commodities strategist of RBC Capital Markets. She was a former CIA analyst. “Israel will escalate its long-running shadow war against Iran” The following are some examples of how to get started: “what is unpredictable is how Iran would respond to such an intensification.”
When sanctions were imposed on Iran in 2011, the country threatened to block the Strait of Hormuz, a narrow shipping route that handles roughly a third of the world’s waterborne oil, according to Bloomberg. Iran has backed down from its threat as the U.S. closely monitors the waterway for Signs of disruption. Even if the scenario is extreme, it shows the uncertainty that traders face.
Chamath Palihapitiya is the CEO of VC company Social Capital. oil prices We’re bound to jump writing Sunday “How does oil not spike again now on the back of two hot wars (Israel-Hamas and Russia-Ukraine) and a 1.5M barrel production cut by OPEC with an SPR [Strategic Petroleum Reserves] that is at the same level it was in the mid 1980s?”
“There is definitely going to be a fear trade put in place,” Phil Flynn is an analyst with Price Futures Group, based in Chicago. told MarketWatch. “While in the short term there is no impact directly on supply, it’s obvious how things play out over the next 24 to 48 hours could change that.”