Oil prices rose on Friday and settled with their biggest weekly gains in over a year on the threat of a wider war in the Middle East following Israel and Iran’s conflict.

Brent crude oil, against which Nigerian crude oil is priced, rose 43 cents (0.6%) to settle at $78.05 per barrel while the US West Texas Intermediate 9WTI) crude oil gained 67 cents (0.9%) to close at $74.38 per barrel.

Israel has vowed to strike Iran for launching a barrage of missiles at Israel on Tuesday after Israel assassinated the leader of Iran-backed Hezbollah a week ago.

Meanwhile, gains were limited as US President Joe Biden discouraged Israel from targeting Iranian oil facilities.

The development has oil analysts warning clients of the potential ramifications of a broader war in the Middle East.

Iranian oil tankers have started moving away from Kharg Island, Iran’s biggest oil export terminal, amid fears of an imminent attack by Israel on the most important crude export infrastructure in Iran.

Market analysts say that the OPEC spare capacity, concentrated in Saudi Arabia and the United Arab Emirates (UAE), would compensate for an Iranian loss of supply.

They noted that an even more significant disruption to supply from the Middle East could lead to triple-digit oil prices, but nothing suggests that attacks on oil infrastructure in other producers in the region or the closure of the Strait of Hormuz are low-probability events.

JPMorgan commodities analysts wrote that an attack on Iranian energy facilities would not be Israel’s preferred course of action.

However, low levels of global oil inventories suggest that prices are set to be elevated until the conflict is resolved, they added.

Iran is a member of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ with production of around 3.2 million barrels per day or 3 per cent of global output.

On Friday, Iran’s Supreme Leader Ayatollah Ali Khamenei appeared in public for the first time since his country launched the missile attack and said the country will not relent.

Supply fears have also eased in Libya as the country’s eastern-based government lifted the force majeure on output and exports just hours after a deal was reached for two compromise candidates to head the country’s central bank, which controls the country’s oil revenues.

Oil surged as markets braced for the possibility that Israel could strike Iran’s energy industry, the latest potential escalation of a conflict that began almost one year ago when Hamas attacked Israel.

Global benchmark Brent crude climbed near $77 after US President Joe Biden indicated Israel was weighing an attack on Iran’s oil infrastructure as a response to Iran’s missile attack on Israel, itself a response to Israel’s killing of leaders of Hezbollah and Hamas and an Iranian general.

When asked if he would support a new Israeli attack, Biden responded “we’re discussing that.”

Israel meanwhile continued to strike Lebanon, killing nine people at a medical site in central Beirut, local authorities said, among other targets. Israel has said it’s targeting Hezbollah militants while Lebanese officials said the attacks have killed more than 1,300 people and displaced over a million.

Tel Aviv also has warned civilians in southern Lebanon to evacuate as Israeli forces expand a ground invasion there. —Margaret Sutherlin

Oil prices gained $3 on Thursday as concerns mounted that a widening regional conflict in the Middle East could disrupt global crude flows with Israel reportedly planning to target Iran’s oil and gas infrastructure.

Brent crude oil, against which Nigerian oil is priced, inched higher by $3.72, or 5.03 percent to close at $77.62 a barrel while the US West Texas Intermediate (WTI) crude appreciated by $3.61, or 5.15 percent to $73.71.

Prices have continued to rise in the aftermath of Iran’s Tuesday attack on Israel, which involved around 200 missiles.

Following the missile barrage, Israel’s ground troops clashed with Hezbollah forces in southern Lebanon, with Israeli Prime Minister Benjamin Netanyahu vowing separate revenge on Iran.

The latest round of escalation was sparked by Israel’s sanctioned elimination of Hezbollah chief Hassan Nasrallah and Hamas political leader Ismail Haniyeh.

The tension was further sparked after US President Joe Biden indicated that there is a possibility of Israel striking Iran’s oil facilities.

This is after Israeli officials said on Wednesday that Israel could target Iran’s strategic energy infrastructure, including oil and gas rigs or nuclear installations, which would have the biggest economic impact, and send shockwaves through oil markets.

Iran is a member of the Organisation of the Petroleum Exporting Countries (OPEC) with production of around 3.2 million barrels per day or 3 percent of global output.

Market analysts also raised concerns that such escalation could prompt Iran to block the Strait of Hormuz or attack Saudi infrastructure as it did in 2019. The strait is a key logistical chokepoint through which 20 percent of daily oil supply passes.

The market will also weigh development coming from Libya as oil production resumed after more than a month of suspended output due to a political standoff between the eastern and western administrations in the North African OPEC producer.

The end of this Libyan crisis will lead to the return of a few hundred thousand barrels of crude per day to the market.

Also, US crude inventories rose by 3.9 million barrels to 417 million barrels in the week ended September 27, the US Energy Information Administration (EIA) said on Wednesday.

A rise in inventories shows that the US market is well-supplied and can withstand any disruptions.