The oil market experienced a significant rise, stimulated by the return of the geopolitical risk premium linked to recent events in Gaza. Initially falling at the start of the session, oil prices reversed their trend to end up, following Israeli airstrikes on Rafah, in the south of the Gaza Strip.
The price of a barrel of Brent, the European benchmark, for delivery in July, increased by 0.50% to reach 83.76 dollars, while its American counterpart, the barrel of West Texas Intermediate (WTI), for delivery in June, rose 0.77% to $78.99.
Geopolitical tensions were reignited by the Israeli army’s strikes in Rafah, even as delicate negotiations for a truce were underway in Cairo between Israel and Hamas.
Andy Lipow of Lipow Oil Associates pointed out that the prospect of Israeli intervention in Rafah has fueled the rise in oil prices.
This geopolitical risk premium has been reinforced by attacks by Houthi rebels off the coast of Yemen, a crucial crossing point for commercial ships. The Iran-backed Houthis launched three drones, causing tensions to escalate in the region.
Overall, these events have led to renewed volatility in the oil market, reflecting growing concerns related to geopolitical conflicts in the Middle East region.
Source: barrel price
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