The recent conflict between Israel and Iran has led to an increase in oil prices due to fears over potential disruptions to the global supply. Brent crude surpassed $81 a barrel, jumping about 15% after Iran's missile strikes on Israel. However, despite this tension, oil prices remain lower than previous months mainly due to slowing demand and increased production from the U.S. and others.
Fatih Birol, executive director of the International Energy Agency, noted the current oil prices are surprisingly subdued in light of the geopolitical tensions. He remarked, "In a normal world, this would have gone skyrocketing," highlighting that typical reactions to such conflicts usually result in higher prices. The current low prices can be attributed to various factors, including new oil entering the market.
Analysts warn that if Israel targets Iranian oil facilities, it could lead to significant disruptions in oil production. Bob McNally of Rapidan Energy Group stated, "We're probably getting into a cycle of Israel on Iran, you know, volleys, if you will, and attacks. And once that gets going, all bets are off," indicating that further escalations could dramatically affect oil prices and global stability.
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