Oil Prices Witness Disruptions As Middle-East Conflicts Escalate

Oil prices rose slightly on Monday amid growing concerns over potential supply disruptions in the Middle East following intensified attacks by Israel on Iranian-backed forces. Brent crude futures for November saw a modest increase of 16 cents (0.22%) to $72.14 per barrel, while the more active December contract gained 10 cents (0.14%) to $71.64 per barrel. U.S. West Texas Intermediate (WTI) crude also edged up by 8 cents (0.12%) to $68.26 per barrel.

Despite recent declines last week, where Brent dropped by 3% and WTI by 5%, Monday’s gains were driven by escalating tensions in the Middle East. Concerns have risen over the possibility of Iran, a major OPEC producer, being drawn further into the conflict. ANZ Research noted that these tensions increase the risk of potential supply disruptions from Iran.

Over the weekend, Israel expanded its military operations, targeting Houthi positions in Yemen and continuing its confrontation with Hezbollah after the killing of its leader, Sayyed Hassan Nasrallah, in Lebanon. The U.S. also stepped up its military presence in the region, with Defence Secretary Lloyd Austin stating that Washington would take necessary measures to defend its personnel if targeted by Iran or its allies.

Later in the day, markets are expected to focus on remarks from Federal Reserve Chair Jerome Powell, which could provide insights into the central bank’s stance on monetary policy easing. However, downward pressure on oil prices remains as OPEC+ plans to raise output by 180,000 barrels per day in December, along with the resumption of oil exports from Libya.