Oil prices jump as US strikes Iran-linked targets in Syria
Oil prices surged by over $1 per barrel on Friday after the Pentagon said the United States hit targets in Syria affiliated with Iran, Reuters reported. The attack has sparked fears of the ongoing war between Israel and Hamas—which has resulted in 8,400 deaths since October 7—spilling over the borders to engulf entire West Asia, a key oil-producing region.
Signs of easing conflict brought prices down earlier
The price of Brent crude futures for December jumped $1.16 or 1.3% to $89.09 per barrel around 9:00am IST. The US West Texas Intermediate (WTI) contract for December rose $1.08 or 1.3% to $84.29 a barrel. This comes after oil prices dropped by over $2 on Thursday after the ongoing conflict showed signs of easing coupled with weakening US demand.
US demand weakened causing prices to drop $2
On Thursday, Brent crude futures fell $2.20 or 2.44% to $87.93 per barrel. Brent settled nearly 2% higher on Wednesday. US West Texas Intermediate crude futures finished at $83.21, down $2.18. The WTI crude futures settled at $83.21, falling $2.18 or 2.55%. Goldman Sachs predicts the first quarter of 2024 Brent crude price at $95. However, lower Iran exports may propel prices by 5%.
US troops attacked in Iraq, Syria
The US military struck two facilities being used by Iran's Islamic Revolutionary Guard Corps (IRGC) and affiliated groups in Syria on Thursday. It said the airstrikes were in response to the attacks on US forces in Iraq and Syria but denied coordinating the strikes with Israel. In the past week, US troops have been attacked 12 times in Iraq and four times in Syria.
No disruption in supply outside of Levant: Traders
Reuters quoted Kelvin Yew, a senior oil trader at Ocean Leonid Investments, saying, "No meaningful supply has been disrupted outside of the Levant," the immediate region at war. However, the spread of the conflict could disrupt supply from Iran, which backs Hamas. A wider conflict may affect supplies from Saudi Arabia, the world's largest oil exporter, and other oil producers in the Gulf.
