Middle East tensions pushed oil prices higher, supply concerns mount

Oil prices extended their upward trajectory for a third consecutive day on Wednesday, October 2, driven by intensifying conflict in the Middle East and heightening fears of disruptions to global crude supplies. The gains, however, were somewhat offset by robust US crude inventories, which tempered immediate supply concerns.

Brent crude rose by $0.64, settling at $74.54/barrel. 

WTI increased by $0.72, to close at $70.82/barrel.

The Middle East situation took a more alarming turn on Tuesday as Iran became directly involved in the conflict, raising the stakes for the oil market. Citigroup Inc. issued a stark warning that a significant strike by Israel on Iran’s oil-export infrastructure could result in the removal of up to 1.5 million barrels of crude from the global market daily, further straining supply.

Despite these concerns, an unexpected increase in US crude inventories reported on Wednesday provided some relief to the market, signalling that the US supply could help mitigate the impact of any potential disruptions.

Written by: Muhammad Hafiz