Middle East Tensions Drive Oil Prices Up: Second Week of Gains

Geopolitical conflicts in the Middle East lead to a surge in global oil prices, with Brent reaching over $93 per barrel. Stay updated on the escalating crisis and its impact on the oil market.

Oct 20, 2023 - 09:26
Oct 20, 2023 - 09:27
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Middle East Tensions Drive Oil Prices Up: Second Week of Gains
Middle East Tensions Drive Oil Prices Up: Second Week of Gains

In the Middle East, where countries are having problems, the price of oil is going up. This is happening for the second week in a row. The main type of oil, called Brent, went up to more than $93 for one barrel. In places like Iraq and Syria, there are more attacks with drones, which are like flying robots. The US also stopped missiles that were going towards Israel from a group in Yemen. Israel is getting ready to send soldiers into Gaza after gathering them at the border.

All of this trouble started on October 7 when a group called Hamas attacked Israel. The US and Europe say Hamas is a very dangerous group. People are worried that this fight might involve other countries like Iran, and even the US because they have sent more soldiers there.

A person who studies these things, Tamas Varga, said, "The important reasons for oil prices are not as important right now because of the sad things happening in Israel and Gaza."

Because of all this fighting, many people are making quick decisions in a special market where they can buy options. These options help them figure out if the price of oil will go up or down. For almost a whole month, more people have been choosing options that say the price will go up.

But some experts from JPMorgan Chase & Co., like Natasha Kaneva, think that even if the fighting spreads more, it might not make oil prices stay high for a long time. They say that right now, the prices are about $7 more than they would be because of the fights.

In other news, the US Energy Department said on Thursday that they want to buy up to 6 million barrels of oil for a special place called the Strategic Petroleum Reserve. They are doing this because they used a lot of oil from there before. Now they want to put it back.

Also Read: Middle East Tensions: Iran's Call for Israel Embargo Impacts Oil Prices

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