Investors pressed the pause button on the oil market recovery to assess the impact of the conflict in the Middle East. After a rise of more than 4% in prices due to fears that the conflict could spread beyond Gaza, the reference indices fell moderately due to the lack of estimates on the situation of production, marketing and export of barrels outside the region.
Recently, Brent/December (CCOM:OILBRENT) fell 0.57%, to US$87.65; and WTI/November (CCOM:OILCRUDE), -0.59%, at US$85.87. So far, there is no evidence that there will be a significant reduction in barrels just because of the war and this even includes a crackdown on oil exports from Iran, which supports Hamas.
If Iran’s involvement turns out to be true, it would provide another boost to prices as the US would enforce sanctions against the country more stringently, squeezing an already tight market.
Saudi Energy Minister Abdulaziz bin Salman said cuts by OPEC+ will continue. In a more positive sign, Venezuela and the US have made progress in negotiations that could ease sanctions on Caracas.