Oil prices jumped more than $4 a barrel in early Asian trade on Monday, as violent eruptions between Israeli and Hamas forces triggered political instability in the Middle Eastern region and consequently affected the price of fuel commodities globally.
The surge in oil prices reversed last week’s downward trend – the largest weekly decline since March – in which Brent fell about 11% and WTI retreated more than 8% amid concerns about high-interest rates and their impact on global demand.
The Saturday attacks were brutal as Palestinian Islamist group Hamas on Saturday launched the largest and most unexpected military assault on Israel in decades, killing hundreds of Israelis and provoking a wave of retaliatory Israeli strikes on Gaza that continued through Sunday.
The attacks drew condemnation from Western nations but were openly praised by Iran and by Hezbollah, Iran’s allies in Lebanon.
Market attention has turned to the possibility of Iranian involvement in the attacks, which Israeli authorities have already alleged.
“For this conflict to have a lasting and meaningful impact on oil markets, there must be a sustained reduction in oil supply or transport,” Vivek Dhar, an analyst at Commonwealth Bank of Australia, said in a note.
With this new development, the fate of least-developed countries hangs in the balance. The Israel-Palestine conflict could further influence the exacerbation of hardships in these countries as we are all interconnected.
