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Highlights
- Brent crude prices increase by over 1% this week.
- Middle East tensions drive potential crude supply risks.
- Israel and Iran conflict heightens market concerns.
Brent crude, the global benchmark, has edged closer to $US79 per barrel, marking a more than 1% gain this week. West Texas Intermediate (WTI) crude remains below $US76 as markets react to escalating tensions in the Middle East, particularly between Israel and Iran.
On Thursday, Israeli Prime Minister Benjamin Netanyahu's security cabinet gathered to discuss the nation’s potential response to Iran's recent missile attack. This development has captured the attention of the crude oil market, highlighting the risks to global oil supply as political tensions rise in the region. The situation has kept the energy markets on alert as the potential for disruptions in the crude supply chain remains a concern.
President Joe Biden has urged caution, advising against any attack on energy facilities in Iran, the third-largest oil producer within the Organization of the Petroleum Exporting Countries (OPEC). Despite these calls for restraint, the possibility of conflict affecting oil infrastructure still looms, leaving the market in a state of uncertainty.
Earlier in the week, Israel's Defence Minister Yoav Gallant emphasized that any move from Israel would be "deadly, precise, and surprising." In response, Iran has pledged retaliation, increasing the prospect of a military exchange. As a significant portion of the world's crude oil supply comes from the Middle East, the market remains sensitive to any disruptions. The region is home to critical oil choke points, further amplifying concerns over potential supply risks.
With these developments, energy markets continue to keep a close watch on the situation, as it could significantly impact global crude oil supplies.
