Oil Prices Soar 6% as Iranian Oil Minister Predicts $100 per Barrel

Oil rises 6%, and the Iranian Oil Minister expects it to reach $100

Oil prices jumped about 6% today, Friday, and Brent crude recorded the highest weekly gain since February, with investors estimating the possibility of expanding the scope of the conflict in the Middle East, with Israel beginning ground raids inside the Gaza Strip.

The occupying state’s announcement of a shift from air attacks to ground operations to eliminate Palestinian resistance fighters represented a major shift in operations, according to Reuters, a week after the start of what was known as the “Al-Aqsa Flood” operation carried out by the Palestinian resistance in the occupied territories.

Brent crude futures rose $4.89, or 5.7%, to $90.89 per barrel, and US crude gained $4.78, or 5.8%, to $87.69 per barrel, as both benchmarks recorded their highest daily percentage gains since April.

Brent also recorded a weekly gain of 7.5%, the largest such increase since February. West Texas Intermediate crude rose 5.9% this week.

The conflict in the Middle East had little impact on global oil and gas supplies, as the occupying state is not a major producer. However, investors and market watchers are assessing how the matter might escalate, and what it might mean for supplies from neighboring countries, in the world’s largest oil-producing region.

In connection with the matter, the Shana Agency, affiliated with the Iranian Ministry of Oil, quoted Minister Jawad Oji saying on Friday that oil prices are expected to reach $100 per barrel, due to the current situation in the Middle East.

On Friday, Iranian Foreign Minister Hossein Amir Abdollahian discussed the conflict between Israel and the Palestinian resistance with the leader of the Lebanese Hezbollah group. If the United States tightens sanctions on Iranian oil exports, due to Iran’s apparent role in the conflict, Iranian oil supplies may decline.

Two informed sources in Riyadh said that Saudi Arabia has frozen US-backed plans to normalize relations with Israel, indicating a rapid rethink of its foreign policy priorities as the conflict escalates.

The Wall Street Journal reported last week that this could have implications for supplies, as Saudi Arabia told the White House that it is prepared to increase oil production early next year, to help secure an agreement.

The rise in prices was also reinforced by the US move on Thursday to impose the first sanctions on the owners of tankers carrying Russian oil at a price higher than the G7 maximum price of $60 per barrel, in an attempt to close loopholes in the mechanism designed to punish Moscow for its invasion of Ukraine.

Russia is also considered the second largest oil producer in the world and a major exporter. The American tightening of inspections of Russian oil shipments may lead to a reduction in its supplies. According to Andrew Lipow, President of Lipow Oil Associates, the oil market expects that the United States will impose tougher sanctions on Russia and Iran, which will lead to a decline in oil supplies.

This week, the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for growth in global oil demand, citing indications of the resilience of the global economy so far this year. OPEC expected further gains in demand in China, the world’s largest oil importer.

In terms of American supplies, drilling companies added four oil rigs this week, in the largest weekly increase since March, according to Baker Hughes, which also indicated that the oil market may witness a decline in supplies, if stricter restrictions are applied to both Russia and… And Iran.

(Reuters, Al-Arabi Al-Jadeed)

2023-10-13 21:57:23
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