- Crude oil prices spiked after Israel assassinated Hamas’s political leader on Iranian soil, leading to threats of retaliation from Tehran.
- The ongoing conflict in the Middle East, combined with record US oil demand, has created a bullish environment for oil prices.
- Early on Thursday morning, WTI was trading around $78.50 while Brent had climbed above $81.
Crude oil prices continued their climb today after a surge yesterday following the news of Israel assassinating Hamas’s political leader Ismail Haniyeh in Iran and a senior Hezbollah official in Lebanon. The fact the Haniyeh assassination was done in Iran gave a significant boost to prices as Tehran immediately threatened retaliation of the sort that oil analysts have said could send Brent crude into three-digit territory.
“Countries with major influence must put more pressure and work more vigorously … to put out the flames of war in Gaza,” China’s UN ambassador said.
Iran’s representative called the assassination of Haniyeh an act of terrorism, according to a Reuters report on the latest developments in the situation. As pressure remains high in the Middle East, Brent crude topped $81 per barrel before paring some of its gains earlier today, and West Texas Intermediate climbed closer to $79 per barrel. In additional bullish news for oil, the Energy Information Administration reported that oil demand in the United States had reached a seasonal record in May, at 20.80 million barrels daily. That was quite a significant revision from EIA estimates, which saw May demand at 20 million barrels daily.
Unless tension in the Middle East gets defused through diplomacy, oil may continue up based on fundamentals and the geopolitical premium.