Oil Prices Rise following Israeli Strikes against Hamas in Qatar

Oil prices surged by approximately $1 per barrel today, with both Brent Crude and West Texas Intermediate (WTI) rising nearly 2% shortly after a series of significant geopolitical events.

Brent Crude futures had gained 99 cents, or 1.87%, reaching $67.37 per barrel, while WTI crude also rose by 98 cents, or 1.5%, settling at $63.60 per barrel.

Latest Oil Prices: 

WTI Crude • 63.83 +1.20 +1.92%

Brent Crude • 67.65 +1.26 +1.90%

Murban Crude • 71.15 +1.60 +2.30%

Louisiana Light • 64.80 -1.66 -2.50%

Bonny Light • 78.62 -2.30 -2.84%

Opec Basket • 69.88 +0.51 +0.74%

Mars US • 71.28 -0.98 -1.36%

Gasoline • 10 mins 2.010 +0.017 +0.86%

Natural Gas • 3.032 -0.085 -2.73%

The spike in oil prices followed a series of geopolitical developments that rattled markets. Israel launched an airstrike against Hamas leadership in Qatar, escalating tensions in the Middle East. Meanwhile, Poland shot down drone aircraft after a Russian attack in western Ukraine, marking the first time a NATO member country fired shots in the ongoing conflict. Additionally, the United States pushed for additional sanctions on Russian oil buyers, targeting key consumers in China and India.

The market initially reacted with a significant increase in prices, with both benchmarks rising by approximately 2% shortly after these events unfolded. However, the gains were tempered by concerns over a global oil supply surplus.

Despite the geopolitical tensions, analysts caution that the “black cloud of excess supply” continues to overshadow the oil market. A report from Reuters quotes analysts at SEB Bank, stating, “Rarely do geopolitical risk premiums in oil last long unless there is a real disruption in supply.”

While the rise in oil prices was driven by the sudden escalation in tensions, analysts also point out that oil supply remains abundant, limiting the potential for sustained price increases. The market remains cautious due to ongoing concerns over surplus oil, especially as global demand remains relatively stable.

In another twist, U.S. President Donald Trump has reportedly urged the European Union (EU) to impose a 100% tariff on oil imports from China and India, two of the largest buyers of Russian oil. This strategy aims to exert additional pressure on Moscow to engage in peace talks with Ukraine. 

Simultaneously, EU officials have been in Washington, D.C. discussing further sanctions against Russia, with European Commission President Ursula von der Leyen confirming that the EU is exploring ways to accelerate its phase-out of Russian fossil fuels as part of new sanctions.

Market watchers are also anticipating a potential interest rate cut by the U.S. Federal Reserve at its upcoming meeting on September 16-17. A potential rate reduction is expected to stimulate economic activity, which could increase oil demand in the short term.