The prices of oil rose more than 3% on Wednesday on growing concerns that tensions in the Middle East could worsen, which could disrupt crude oil production in the regionafter the largest military coup in Iran’s history against Israel.
In this way, the futures of Brent They reach their highest level in a month, on this day they advance 3.3%, to $75.98 dollars per barrel. American crude oil West Texas Intermediate (WTI) rose 3.5%, to $72.30.
On Tuesday, both benchmarks rose more than 5% before closing up about 2.5%.
The causes behind the rally in the oil barrel
Iran said early Wednesday that its missile attack on Israel had ended, unless there is a new provocationwhile Israel and the United States vowed to strike back at Tehran as fears of a broader war intensified.
“This could include damaging or destroying Iranian oil facilities,” said Tamas Varga of broker PVM.
Tehran said that any Israeli response to the attack, in which Israel said more than 180 ballistic missiles were launched, would be met with a “vast destruction.”
Varga noted that retaliation from Iran or its allies could hit Saudi oil facilities as in 2019 or see the Strait of Hormuz closed. “Any of these events would irrevocably send oil prices considerably higher,” he said.
In another escalation of the conflict, the Israeli military on Wednesday sent regular infantry and armor units to join ground operations in southern Lebanon against Iran-backed Hezbollah.
The United Nations Security Council scheduled a meeting on the Middle East for Wednesday, and the European Union called for an immediate ceasefire.
According to ANZ analysts, Iran’s oil production reached its highest level in six years in August, at 3.7 million barrels per day (bpd).
“A major escalation by Iran could lead the United States to war”Capital Economics noted in a note. “Iran accounts for about 4% of global oil production, but an important consideration will be whether Saudi Arabia increases production if Iranian supplies are disrupted.”
A group of OPEC+ ministers, which includes Russia, meet later on Wednesday to review the market, with no policy changes expected. The group plans to increase production by 180,000 bpd per month starting in December.
ANZ analysts noted that “Any signs of production increases could offset concerns about supply disruptions in the Middle East.”
However, Saudi Arabia’s oil minister said oil prices could fall by up to $50 per barrel if OPEC+ members do not stick to agreed production limits.as reported on Wednesday by the Wall Street Journal citing delegates from the oil producers group.
Source: Ambito
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