Oil prices have continued to climb amid growing fears that Israel could target Iranian oil facilities.
Brent crude, the global benchmark, rose 0.6% to over $78 a barrel after gaining more than 8% this week. U.S.-produced West Texas Intermediate increased 0.5%, trading above $74.
The escalation of overnight Israeli assaults on Hezbollah positions in Lebanon comes as Israel considers retaliating for Iran’s missile strikes on its territory.
Crude prices surged by around 5% on Thursday after U.S. President Joe Biden stated he was “discussing” potential Israeli strikes on Iranian oil sites in response to Tehran’s attacks.
However, analysts cautioned that slowing demand in many countries and ample supply from both OPEC and non-OPEC producers could eventually cap price increases.
David Oxley, commodities economist at Capital Economics, remarked, “While geopolitical risks are currently in the spotlight, it’s important not to overlook the fundamental drivers of the oil market, which do not support sustained higher prices.”
