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CSIS: The Israel-Hamas conflict is expected to have implications for the energy market, particularly if the situation escalates to involve Iran or Hezbollah. Immediate impacts include a rise in Brent crude prices to nearly $89 per barrel.
The conflict could potentially derail U.S.-Saudi cooperation and normalization talks between Saudi Arabia and Israel. Iran’s role in the conflict, especially if found to be supporting Hamas, could lead to tighter sanctions on its oil exports, affecting supply.
Iran has been increasing oil supplies to the global market since May, offsetting production cuts by Saudi Arabia, Russia and other producers. From May through September 2023, Iran’s crude and condensate exports were ~1.4 million barrels per day (b/d). Its supply has returned to levels not seen in the last 4 years. Apparently the US turned a blind eye to sanctions violations by importers of its oil during this time. Washington has been negotiating with Tehran to release US prisoners and unfreeze Iranian billions in banks in Qatar and South Korea.
The US and EU accuse Iran of sponsoring Hamas and a new round of tougher anti-Iran sanctions is on the table. Another major supplier drops out of the global oil market, which means that the “price ceiling” for Russian oil will not be “finalized” despite its obvious failure.
The entire article can be read at the link https://www.csis.org/analysis/energy-market-implications-israel-hamas-conflict
