Oil Price Jumps After Biden Says ‘Discussing' Israeli Strike on Iranian Facilities
Oil Prices Jump Amid Middle East Tensions #
Oil prices surged on Thursday following comments from the U.S. President regarding potential strikes on Iranian oil facilities. The remarks reflected ongoing discussions about possible responses to recent events in the region.
The market reaction highlighted continued nervousness about potential Israeli military retaliation against Iran, following a missile attack earlier in the week. While the attack caused little damage, it heightened fears of an escalating conflict in the area.
Oil prices rose more than 4 percent on Thursday, with the global benchmark climbing above $77 a barrel for the first time in a month. This marked a significant increase from the pre-attack price of just above $71 a barrel.
Israel’s leadership has indicated that there would be consequences for the missile attack, stating that Iran had made a mistake and would face repercussions.
When questioned about allowing Israel to retaliate, the U.S. President clarified that the United States advises rather than allows Israel’s actions, and that no immediate action was expected.
Iran, a major oil producer contributing about 2 percent of the world’s supply, faces international sanctions that impact its production and sales. The majority of its exports are purchased by China.
The escalating conflict between Israel and Iran, as well as Iranian-backed groups, has been a key factor in driving up oil prices this week. The main concern is that the intensifying situation could lead to disruptions in oil flow from major exporters in the region.
Despite the recent increases, oil prices have not returned to their earlier peaks this year. Factors such as weak energy demand in China and increased oil production in various countries have counterbalanced concerns about the Middle East conflict.
An agreement by several oil producers to gradually reduce production cuts has also influenced market dynamics. While these increases were recently postponed, the anticipation of increased supplies has offset some worries about potential supply disruptions due to the Israel-Iran conflict.
Prior to recent events, oil prices had been on a downward trend, falling from about $90 a barrel six months ago.