Brent breaks above $80/bbl as Middle Eastern conflict intensifies

The front-month ICE Brent contract gained $1.94/bbl on the day, to trade at $81.20/bbl at 09.00 GMT.

PHOTO: Black oil pump jacks in the desert of Bahrain. Getty Images

Upward pressure:

Brent futures rebounded after supply concerns resurfaced due to the escalating Israel-Hamas conflict.

Israel’s ground offensive in the Gaza Strip to eradicate Palestine-based Hamas militants could last “for many months,” its chief of staff Herzi Halevi said in a televised statement, Reuters reported.

Meanwhile, an Israeli airstrike that killed a senior officer of Iran’s Islamic Revolution Guard Corps (IRGC) in Syria on Monday also supported Brent’s price gains, analysts said.

“Oil prices continued to rise due to a significant uptick in geopolitical risk after Iran vowed retribution following the killing of commander Mousavi [IRGC officer] in an Israeli airstrike in Syria's Damascus,” SPI Asset Management’s managing partner Stephen Innes said.

“With tensions escalating in the Middle East, any plans to resume shipping in the Red Sea soon might be misplaced,” he further added.

Downward pressure:

Some shipping firms have announced plans to resume operation on the Red Sea shipping routes. This news has provided support to fading supply concerns in the market and put some downward pressure on Brent futures today.

Container giant CMA CGM and Danish shipping company A.P. Moller-Maersk have announced plans to resume vessel transits through the Suez Canal and the Gulf of Aden in the Red Sea.

The shipping companies regained confidence to operate in the Bab al-Mandab Strait after a US-led maritime task force was deployed to counter attacks by Iran-aligned Yemeni Houthi militants.

By Aparupa Mazumder

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