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Oil prices surged nearly 4% on Tuesday following Iran's ballistic missile attacks on Israel, launched in retaliation for Israel’s campaign against Tehran’s Hezbollah allies in Lebanon.
The strikes triggered alarms across Israel, with explosions heard in Jerusalem and the Jordan Valley, sending residents rushing to shelters.
Brent crude futures rose $2.51, or 3.5%, to $74.21 a barrel by 8:52 p.m. Meanwhile, U.S. WTI crude increased $2.41, or 3.5%, to $70.58.
An Israeli attack on Iranian oil production or export facilities could cause significant disruption, potentially impacting over one million barrels per day, experts warned.
Meanwhile, Yemen’s Houthi group claimed responsibility for attacking at least one of two ships damaged off the port of Hodeidah. The Houthis have targeted international shipping near Yemen since November, expressing solidarity with Palestinians in the ongoing Israel-Hamas conflict in Gaza.
Before the news of a possible Iranian missile strike, oil markets were trading near a two-week low, as expectations for increased supply and sluggish global demand overshadowed concerns about the escalating Middle East conflict and its impact on crude exports.
OPEC+ ministers are scheduled to meet on Oct. 2 to review the market, with no policy changes expected. Starting in December, OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, plans to boost output by 180,000 barrels per day each month.
The potential recovery of Libyan oil production also played a role earlier on Tuesday. Libya’s eastern parliament approved a new central bank governor on Monday, which could help resolve the crisis that has curbed the country's oil output.
Both Iran and Libya are OPEC members. Iran, under U.S. sanctions, produced around 4 million barrels of fuel in 2023, while Libya’s output was approximately 1.3 million barrels last year, according to U.S. Energy Information Administration data.
[Information sourced from CNA]
