Oil rises 1% amid fears of expanding Middle East conflict
Oil prices rose about 1 percent, Friday, as investors feared the expansion of the conflict in the Middle East, which could disrupt supplies after reports emerged that the US military bombed Iranian targets in Syria.
Brent crude futures for December delivery rose 93 cents, or 1.1%, to $88.86 a barrel. US West Texas Intermediate crude futures for December delivery also increased 91 cents, or 1.1%, to $84.12 per barrel.
Both crude oil rose by more than 2% per barrel earlier in the session.
The US Department of Defense said on Thursday that the strikes on two facilities in eastern Syria used by the Iranian Revolutionary Guard and groups it supports came in response to recent attacks on US forces in Iraq and Syria.
Although the developments did not directly impact supplies, fears increased that the conflict in the Gaza Strip could spread and disrupt supplies from major crude oil producer Iran.
Analysts from Goldman Sachs kept their expectations for the Brent price in the first quarter of 2024 at $95 per barrel, but added that the decline in Iranian exports may push core prices to rise by about 5%.
They indicated in a note that prices could jump by up to 20% if the least likely scenario materializes, which is the disruption of trade through the Strait of Hormuz, through which 17% of global oil production passes.