News and Information from the Financial Markets

Escalation in Gaza - What does the oil price do?

The situation in the conflict between Israel and Hamas seems to be escalating. The IDF began attacking targets in Gaza with ground troops and tanks on Saturday. Fears of a major escalation could drive up oil prices.

Oil prices initially showed the urge to go up after the Hamas attack on 7 October. Thus, WTI briefly rose to over 89 US dollars per barrel at the peak and Brent reached the 92 US dollar mark. However, when it became clear that the Israeli forces would not launch a quick offensive into the Gaza Strip, oil prices fell back somewhat and are currently hovering around $84 and $88 respectively.

Fear of oil supply collapse

On Saturday night, the IDF has now intensified its attacks and has advanced with ground troops into the north of the Gaza Strip. If this is the beginning of the announced offensive, there is a danger that Hezbollah will open a second front from Lebanon and possibly even a third front also from Syria. In this case, it is to be expected that US troops will intervene more strongly in the conflict on the ground. This is to be expected in particular because various US bases in the region have already been attacked by drones. An escalation is likely to intensify these attacks and force the US to act.

Since Iran, which is not officially involved but which supports both Hamas and Hezbollah in the background, could increase its role in the conflict, there is a risk of a conflagration. This threat could significantly increase fears of a significant drop in oil supply and send oil prices northwards again. In this case, it cannot be ruled out that WTI will exceed the $90 per barrel mark quite quickly and Brent will strive towards $100 per barrel.


Related Articles

Risk Warning: Trading CFDs and other leveraged financial products on margin and derivatives always involves a high degree of risk. There is a possibility of losing all or part of your invested capital. Therefore, these products may not be suitable for all investors. Please ensure that you obtain detailed information on these products and/or consult an independent financial advisor.

The website operator may be remunerated by advertisers on this website based on your interaction with the advertisements or advertisers.

Disclaimer: The authors' assessments of market behaviour contained on this website do not constitute financial advice or a solicitation or recommendation to buy or sell financial products, but are merely a personal assessment. If you incorporate the author's assessment into your decision, you do so entirely at your own risk. If you trade in financial products, you must be aware that you may incur a loss of up to the amount of your entire investment. Actively familiarise yourself with trading and the characteristics of the instruments, especially leveraged derivatives, and/or seek independent advice before investing your own money and only use capital that you can afford to lose.

We use cookies

We use cookies on our website. Some of them are essential for the operation of the site, while others help us to improve this site and the user experience (tracking cookies). You can decide for yourself whether you want to allow cookies or not. Please note that if you reject them, you may not be able to use all the functionalities of the site.