ECONOMY
Oil Prices Continue Climbing Amid Israel-Hamas War, Middle East Tensions
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Oil prices are rising for the second week in row, and concerns are growing that war in Israel and broader tensions in the Middle East could send prices higher.
West Texas Intermediate, the U.S. benchmark for crude oil, was trading at $89.21 per barrel shortly before noon ET on Friday. Brent crude oil, the European benchmark, was trading at $93.30 per barrel.
Prices have been rising since Hamas militants launched a deadly surprise incursion into Israel from the Gaza Strip on Oct. 7, prompting a formal declaration of war from Israel and the ongoing bombardment of Palestinians in Gaza.
Saudi Arabia, the world’s largest exporter of crude oil and the de facto leader of OPEC, at the beginning of October opted to continue its production cut through the end of the year. But U.S.-brokered negotiations on normalization of relations with Israel fell apart when war broke out.
The Kingdom has restored diplomatic relations with Iran, meanwhile, and both countries are siding with the Palestinians in the conflict. On Wednesday, Iran called for a complete oil embargo against Israel by Islamic producers.
Iran’s oil production has been rising in recent months, and any further U.S. sanctions as a result of the conflict could lower their output again, sending prices higher.
The production cuts initiated by OPEC+, which includes Russia, have strained Saudi relations with the U.S., which recently faced rapidly rising gas prices, though they have come back down in recent weeks.
According to auto club AAA, the national average price for a gallon of regular unleaded gasoline in the U.S. on Friday was $3.56, down from $3.62 a week ago and $3.88 a month ago. California, which recently saw gas over $6 per gallon, had a statewide average price on Friday of $5.49 per gallon.
U.S. oil production, meanwhile, is at an all-time high. In its latest weekly report, the U.S. Energy Information Administration reported domestic production in the week ending Oct. 13 reached 13.2 million barrels per day, breaking a record set in 2020 by about 100,000 barrels.
TMX contributed to this article.
