Brent surged following Biden’s latest remarks on the Israel-Iran conflict

The front-month ICE Brent contract has moved $3.88/bbl higher on the day, to trade at $78.44/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Oil rallied as tensions continued to escalate in the Middle East. The conflict has now dragged in OPEC’s second-largest oil producer, Iran.

Brent’s price surged following reports that Israel’s next target could be Tehran’s oil and energy facilities, market analysts said.

“Oil prices skyrocketed… as investors scrambled for cover amid the brewing chaos in the Middle East,” SPI Asset Management’s managing partner Stephen Innes said.

The Pentagon and the Israel Defense Forces (IDF) are “discussing” possible airstrikes on Iranian oil infrastructure in response to Tehran’s missile attack earlier this week, US President Joe Biden said.

In a clip shared by Reuters, when asked if Washington would back an Israeli attack on Iran’s oil facilities, Biden responded, “We are discussing that.”

“Brent crude rose… on the news [that Israel could strike Iranian oil sites] as markets start to price in the likelihood of supply disruptions in the Middle East,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.

“The region accounts for about a third of global supply,” Hynes added.

Downward pressure:

Brent’s price felt some downward pressure as Libya’s state-owned oil company National Oil Corporation (NOC), which oversees most of the country's oil resources, officially lifted force majeure on oil production and exports yesterday.

Crude oil production in the Sharara and El-feel oilfields, two of the largest Libyan oil production sites, and exports from Essider have resumed, NOC said in a statement.

The news comes as OPEC+ plans to proceed with production hikes in December, a move that will push the global oil market into over-supplied territory, according to market analysts.

Libya has a production capacity of about 1.2 million b/d, according to OPEC. 

By Aparupa Mazumder

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