New York, United States – Oil prices experienced a 3% surge on Friday, reaching a one-week high, driven by escalating tensions in the Middle East, raising concerns about potential disruptions in global crude supplies, Reuters reported.
Brent crude futures increased by $2.55, or 2.9%, settling at $90.48 a barrel, while US West Texas Intermediate (WTI) crude saw a rise of $2.33, or 2.8%, closing at $85.54.
The widening gap between Brent and WTI prices, reaching its highest level since March, is making it more enticing for energy firms to export crude from the U.S.
Throughout the week, Brent experienced a 2% decline, while WTI saw a 4% decrease, reflecting the volatile nature of the oil market.
In the Middle East, Israeli air and ground forces escalated operations in the Gaza Strip, where reports of heavy bombings have emerged. Hamas, on the other hand, has linked the release of hostages in Gaza to a ceasefire in Israel’s bombardment of the Palestinian enclave, which began nearly three weeks ago after a Hamas incursion into southern Israel.
Several countries, including numerous Arab states, have urged Israel to reconsider a planned ground invasion, expressing concerns about civilian casualties and the potential for a broader conflict.
As of now, Middle East developments have not directly impacted oil supplies. However, concerns persist regarding potential disruptions to exports from major crude producer and Hamas supporter, Iran, and other key players in the region.
Goldman Sachs analysts, cited by Reuters, maintained their first-quarter 2024 Brent crude price forecast at $95 a barrel, with the caveat that lower Iranian exports could drive baseline prices up by 5%.