Oil prices dip slightly amid ongoing Middle East conflict

October 10, 2023 11:58 AM AEDT | By Investing

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Oil prices dip slightly amid ongoing Middle East conflict — Image source: Kalkine Media

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Investing.com - Oil prices eased on Tuesday following a 4% increase in the previous session as market participants assess potential supply disruptions amid ongoing conflict between Israel and Hamas.

By 11:00am AEST (1:00am GMT) Brent and West Texas Intermediate crude were down by 0.3%.

Although Israel is not a substantial producer of crude oil, there are growing concerns that an escalation of the conflict could disrupt supply from the Middle East and exacerbate an anticipated deficit for the rest of the year.

As a result of the conflict, Israel's Ashkelon port and its oil terminal have been temporarily closed, sources reported on Monday.

The ongoing fighting could potentially hinder U.S. efforts to negotiate a reconciliation between Saudi Arabia and Israel, which could have led to an increased output next year as part of the agreement.

Analysts also suggest that the ongoing unrest may lead the U.S. to intensify its sanctions on Iran, which could negatively impact the export of Iranian oil.

Despite the lack of concrete evidence or intelligence pointing to Iran's direct involvement in the attacks, a White House spokesperson stated on Monday that Iran is complicit.

On a more positive note for oil supply, there have been advancements in talks between Venezuela and the U.S. This could potentially provide sanctions relief to Caracas by allowing at least one additional foreign oil firm to handle Venezuelan crude oil under certain conditions, according to sources.

This article first appeared in Investing.com

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