Oil is on course for its strongest week in over a year, driven by escalating conflict in the Middle East, including Israeli airstrikes on Beirut, Lebanon.
Brent crude, the global benchmark, held steady below $78 per barrel overnight after surging 5% the previous day. This came as U.S. President Joe Biden indicated discussions were underway regarding potential U.S. support for Israeli attacks on Iranian oil facilities.
Crude prices have climbed nearly 8% this week, marking the largest increase since April 2023, amid concerns that the conflict could expand into a broader regional war.
Citigroup estimated that a major Israeli strike on Iran’s export infrastructure could remove 1.5 million barrels of daily supply from the market, while an attack on smaller facilities could cut production by 300,000 to 450,000 barrels.
Vishnu Varathan, head of economics and strategy for Asia at Mizuho Bank, noted that “there are fears Israel may target Iran’s oil production capabilities, aiming to hit the country financially where it would hurt most.”
