There is growing anxiety about the impact of a widening war in the Middle East on oil prices. Brent Crude jumped to more than $77 a barrel Thursday.
There is growing anxiety about the impact of a widening war in the Middle East on oil prices.
Brent Crude jumped to more than $77 a barrel Thursday, after President Joe Biden was asked about Israeli retaliation for Iran’s missile attack earlier in the week.
He said it was under discussion and clarified his position Friday, saying “the Israelis have not concluded how they’re what they’re going to do in terms of a strike. That’s under discussion. If I were in their shoes, I’d be thinking about other alternatives than striking oil fields.”
Israeli Prime Minister Benjamin Netanyahu has said Tehran made a big mistake with the missile attack and warned Iran will pay for it.
Iran’s supreme leader praised the attack Friday saying Iran is ready to do it again if necessary.
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Former Deputy Secretary of State Wendy Sherman said, “we should all understand that this war will get wider, that it may involve the United States in ways we wish it would not, that it may change oil prices for America as we head toward the winter.”
Iran is a major oil producer, pumping about two percent of the world’s supply. Because of international sanctions most of it is exported to China.
The absence of Iranian oil in the market isn’t the main concern.
Former Deputy Director of National Intelligence Beth Sanner said, “it is what Iran does in response that might take other oil off the market. For example, if they cut off tankers through the straits of Hormuz or they directly strike against Saudi Arabia’s oil industry, for example.”
Increased oil production in the U.S and weak demand in China have helped keep prices down this year. Now many will be keeping a close eye on events in the Middle East to see if that holds.
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