Global oil prices surged higher Friday, topping the $90 per barrel mark, following rising military and political tensions in Israel's war with Hamas and a new round of sanctions on the sale of Russian crude.
Iran's foreign minister, Hossein Amirabdollahian told reporters in Beirut late Thursday that an extended blockade of Gaza, as well as attacks on civilians by the Israeli Defense Force, could possibly compel involvement from Tehran. Amirabdollahian also met with Hezbollah leader Hassan Nasrallah Friday in the Lebanese captial.
“The continuation of the war crimes against Palestine and Gaza will definitely be met with reactions in other axes in the region,” said Amirabdollahian.
The comments, alongside a move by the Biden administration to impose fresh sanctions on tanker operators moving Russian crude that is priced above the $60 cap put in place last year following Moscow's invasion of Ukraine, added to concerns for supply disruptions in the region heading into a potentially volatile weekend.
Hamas, which launched the deadly attacks on Israel from Gaza last week, has called for a 'day of rage' protests from the Muslim world Friday, while Israel has set a 24-hour deadline for the evacuation of Gaza City in preparation for a ground assault on the territory's capital.
"There is little doubt that a prolonged Israel-Hamas war could destabilize the Middle East, and in a worst-case scenario reduce global supply after Iran’s foreign minister warned that Tehran-backed militants could open a new front," said Saxo Bank's chief commodity strategist Ole Hansen.
"While the macroeconomic outlook remains challenged and demand shows signs of softening, not least in the US where implied gasoline demand on a four-week average basis shows continued weakness, the prospect of a geopolitical-led supply disruption and continued production restraint from OPEC+ will underpin prices in the weeks ahead," he added
Brent crude futures for December delivery, the global pricing benchmark, were last marked $3.78 higher in the early afternoon trading in New York and changing hands at $89.76 per barrel, topping the level that it reached on the Monday following Hamas' surprise weekend attack.
WTI futures for November, which are tightly-linked to U.S. gasoline prices, were marked $4.48 higher at $90.48 per barrel.
On Wall Street, Exxon Mobil (XOM) -) shares were marked 3.36% higher in early afternoon trading on the NYSE to change hands at $110.00 each, while Chevron (CVX) -) gained 2.05% to $164.49 each.
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