Crude oil price hits $90 over Israel, Hamas conflict

VAM News Update

THE ongoing conflicts between Israel and Hamas in the Middle East has sparked concerns about potential disruptions to oil production in the region, pushing the price of Brent crude to $90.89 per barrel at the weekend.

This conflict has raised concerns about a potential ground attack by Israel, prompting preparations and mobilization of significant military forces.

Meanwhile, the International Energy Agency (IEA) recently stated that the situation in the market is rife with uncertainty.

However, they emphasised that, as of now, the ongoing war has not directly impacted the physical supply of oil. It is important to note that during the recent Russian Energy Week International Forum held in Moscow, President Vladimir Putin emphasized OPEC’s strong commitment to ensuring stability in the global oil market, especially in the face of escalating tensions in the Middle East.

He highlighted the dedication of all OPEC members to upholding their agreements and effectively navigating through any challenges that might emerge in the process.

Putin’s remarks underscored the collective responsibility and determination of OPEC nations to maintain equilibrium in the oil market amidst geopolitical uncertainties.

A concerted effort to reduce oil production is currently underway, primarily orchestrated by OPEC countries, with significant contributions from Russia and Saudi Arabia, major stakeholders in the global oil market.

These production cuts have been in effect for several months and are intended to persist until the conclusion of 2023, showcasing the steadfast commitment of both Saudi Arabia and Russia to this strategic initiative.

As a direct result of these reductions in oil production by influential oil-producing nations, global oil prices experienced a noticeable uptick, reaching a peak of $97 per barrel at one point.

However, subsequent to this surge, oil prices have somewhat stabilized and retreated to around $84 per barrel as of last week.

The efforts to curb production have thus influenced market dynamics, impacting oil prices on the global stage.