Increased risk of a region-wide Middle East war continued to push oil prices higher on Monday as Brent crude oil rose by $2.88, or 3.7 percent to settle at $80.93 per barrel.
Also, the US West Texas Intermediate (WTI) advanced by $2.76, or 3.7 percent, to $77.14 per barrel.
This extends gains from last week where the international benchmark rose more than 8 percent and WTI advanced by more than 9 percent week-on-week, the most in more than a year.
This is after Iran’s October 1 missile barrage against Israel raised concerns that the response from Israel would aim at the country’s oil infrastructure.
Market analysts warned that oil prices could rise by another $3 to $5 per barrel.
The development continued on Monday as Iran-backed Hezbollah hit Israel’s third-largest city, Haifa.
Israel, meanwhile, looked poised to expand ground incursions into southern Lebanon on the first anniversary of the Gaza war that has spread conflict across the Middle East.
After a year of war, authorities have stated officially that 728 troops have been killed and 26,000 missiles have been fired at Israel, compared to over 40,000 killed in Gaza.
Some analysts have suggested that Israel could strike a key export artery for Iranian oil, among other oil and gas targets that the US has asked Israel to avoid.
US President Joe Biden said that if he were in Israel’s shoes, he would consider alternatives to striking Iranian oil fields.
An attack on Iranian energy facilities would not be Israel’s preferred course of action, JPMorgan commodities analysts wrote on Friday.
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.
Still, low levels of global oil inventories suggest that prices are set to be elevated until the conflict is resolved.
OPEC+ is due to start raising production in December after cutting in recent years to support prices because of weak global demand.
