More than 2,000 rockets were fired from Gaza into Israel, while Hamas fighters used paragliders to enter Israel through the air to conduct ground assaults against military and civilian targets. U.S. crude futures rose above $86 per barrel, at one point climbing 5.4 percent, according to Bloomberg. “Recently crude has been prone to overreact to geopolitical events and price increases have been short-lived,” Rebecca Babin, a senior energy trader at CIBC Private Wealth, told the publication. “This situation may prove to be the exception.” Reports are now indicating that Iran may have played a role in the attack, which could lead to a military response against Tehran, endangering the free passage of shipping vessels through the Strait of Hormuz, a vital route for much of the world’s crude. Bloomberg reported multiple predictions about oil prices in the wake of the deadly attack:The price of oil is surging after a deadly attack against Israel over the weekend reignited Middle East instability.
"The conflict poses a risk of higher oil prices, and risks to both inflation and the growth outlook," Karim Basta, chief economist at III Capital Management, told Reuters. Pierre Andurand, a hedge fund manager and energy trader, said in a post on social media platform X that the conflict could “eventually have an impact on supply and prices.” He added:
Now, over the last 6 months we have seen a very large increase in Iranian supply due to weak enforcement of sanctions. As Iran is also behind Hamas’ attacks on Israel, there is a good probability that the US administration will start enforcing those sanctions on Iranian oil exports more tightly. That would further tighten the oil market. Also the probability that this will lead to direct conflict with Iran is not zero. “There’s also a risk of the conflict escalating regionally. If Iran is sucked into it, there could also be supply issues, though we’re not at that stage yet,” Eurasia Group’s director of energy, climate and resources Henning Gloystein told CNBC in an email.
