Oil Prices Surge, Marking Biggest Weekly Gains in Over a Year
Oil prices experienced a notable increase on Friday, achieving their largest weekly gains in over a year amid rising tensions in the Middle East. Despite this, gains were somewhat tempered by U.S. President Joe Biden’s remarks urging Israel to refrain from targeting Iranian oil facilities.
Brent crude futures climbed by 43 cents, or 0.6%, settling at $78.05 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by 67 cents, or 0.9%, to close at $74.38 per barrel.
The situation escalated when Israel vowed to retaliate against Iran for a recent missile barrage, following the assassination of a Hezbollah leader linked to Iran. Analysts have warned of the potential implications of a wider conflict on oil prices.
During trading, oil prices surged nearly 2% but later retracted after Biden suggested that if he were in Israel’s position, he would consider alternatives to attacking Iranian oil facilities. This follows a significant jump in oil benchmarks of over 5% on Thursday after Biden confirmed U.S. discussions with Israel regarding possible military actions against Iranian energy infrastructure.
On a weekly basis, Brent crude gained over 8%, the most significant increase since January 2023, while WTI rose 9.1%, marking its largest weekly gain since March 2023.
Analysts from JPMorgan noted that while an attack on Iranian energy facilities is not Israel’s preferred option, low global oil inventories suggest prices are likely to remain elevated until the conflict is resolved. Current inventory levels, reported to be at 4.4 billion barrels, are the lowest on record, well below last year’s levels when Brent was trading at $92.
Brokerage StoneX has projected that oil prices could rise by $3 to $5 per barrel if Iranian oil infrastructure is targeted.
On Friday, Iran’s Supreme Leader Ayatollah Ali Khamenei made his first public appearance since the missile attacks, calling for intensified anti-Israel actions. Iranian officials warned that if Israel strikes, they will target Israeli energy and gas installations in retaliation, as reported by the semi-official Iranian news agency SNN.
