Brent crude price surged to $88.15 a barrel following a series of brazen attacks by Hamas militants on southern Israel.
This significant jump, amounting to a 4.1% increase, highlights the immediate market reaction to the violence in the Middle East.
The attacks, which saw Hamas fighters cross the border, resulted in over 700 Israeli casualties and dozens abducted, while over 400 Gaza residents have tragically lost their lives in retaliatory Israeli strikes.
Israeli Prime Minister Benjamin Netanyahu declared that his nation is now at war, promising “mighty vengeance” while Iran’s President Ebrahim Raisi congratulated the Hamas chief on the “victory.”
These reactions from influential leaders underscore how the Hamas attacks could disrupt relationships in the Middle East.
One immediate concern is the potential for Israel to perceive Iran as an active participant in the attacks, possibly leading to covert actions against the Islamic State.
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This development puts Saudi Arabia and the United Arab Emirates in a precarious position as they try to normalize relations with Israel amid its conflict with Hamas which is expected to result in significant civilian casualties in Gaza.
Moreover, the attacks raise questions about Iran’s role in the region because by supporting Hamas, Tehran risks jeopardizing its détente with Saudi Arabia and could face a shift in the Biden administration’s approach to Iranian oil exports, which had been on the rise.
The Hamas attacks have not only caused a spike in Brent crude prices but have also paused efforts to normalize political relationships across the Middle East.
The region now faces heightened uncertainty and risks, which could keep oil markets on edge in the days to come.