Following Hamas attack on Israel, global crude oil prices jump

On Monday, global crude oil prices rose as the Israel-Hamas war began its third day, with heavy casualties on both sides. Brent crude, widely regarded as the world benchmark, rose as much as 5% before reversing.

Crude oil prices were trading at USD 87.61 a barrel at the time of publishing this report, up 3.52 percent from the previous week’s close. WTI crude was nearly 3% higher at USD 85.96 per barrel, up from an intraday high of USD 87.23. This comes amid uncertainty in the global inflation forecast, as oil prices were already elevated due to supply fears induced by output curbs by several producing countries. So far, at least 700 Israelis have been slain, with 300 Palestinians killed.

On the impact on the oil and energy sector amid the Israel-Hamas war, Union Petroleum Minister Hardeep Singh Puri said, “India will handle it with maturity. As far as the energy sector is concerned, the place where the action is taking place is in many respects the center of global energy. We will watch very carefully. We will navigate our way through this. These kinds of uncertainties only encourage people to sustainable and cleaner fuel.”

“Oil prices rose more than 4 per cent in early Asian trading on Monday as Hamas attack on Israel threatened to inflame tensions in the Middle East, the source of around a third of the world’s crude…,” Ravindra V.Rao, CMT, CFTe, EPATian VP-Head Commodity Research, said.

“The fallout in markets will likely be determined by whether conflict spreads to the rest of the Middle East region, with oil traders also shifting focus to Iran, which is both a major oil producer and supporter of Hamas,” said Deepak Jasani, Head of Retail Research, HDFC securities.

Furthermore, OPEC is expected to release its annual World Oil Outlook on Monday, with updated predictions for long-term demand and supply.

This latest pricing pressure on energy prices would most certainly be a concern for policymakers in India, which is a significant importer of crude oil from multiple sources. On Friday, the Reserve Bank of India (RBI) expressed grave concern about growing inflation and its possible impact on the GDP outlook.