Oil prices jumped higher on Monday following the surprise terror attack on Israel by Hamas.
The price of Brent crude, the global benchmark, rose by around four percent to close to $88 a barrel. Brent prices are most closely associated with the price of gasoline in the U.S.
The price of West Texas Intermediate, the U.S. benchmark, rose by just over four percent to around $86 a barrel.
Israel has announced a “complete siege” of the Gaza strip following Hamas’s massive attack on the Jewish state. The death toll has risen to 800 people as of Monday morning and more than 2,500 are reported wounded.
Oil traders are speculating what the war could mean for global oil supplies. The Wall Street Journal reported on Monday that Iran was involved with planning the attack. Oil traders believe this could result in increased enforcement on exports of Iranian oil.
Prolonged fighting could also complicate efforts by the Biden administration to convince OPEC+ to increase production to lower the price of oil. Iran is a member of the oil cartel.
Escalating violence in the region could jeopardize the process that has seen an increasing normalization of relations between Saudi Arabia and Israel. Some analysts suspect that the Hamas terror attack was meant to derail proposed deals between the two countries.
