The price of Kuwaiti crude oil experienced a significant increase of $1.42, reaching $91.55 per barrel, as reported by the Kuwait Petroleum Corporation. This notable price surge is attributed to the ongoing tensions between Israel and Hamas, with experts considering this weekend’s developments as a potential game-changer in the geopolitical landscape.
While Kuwaiti crude oil prices saw an upturn, international markets told a slightly different story. Forward transactions of Brent crude oil dropped by 50 cents, settling at $87.65 per barrel. West Texas Intermediate experienced a decrease of 41 cents, with prices hitting $85.97 a barrel.
Industry analysts anticipate further increases in crude oil prices in the coming days, with war premiums returning to the oil market in light of the heightened conflict. The instability in the Middle East has raised concerns about potential disruptions in the supply of oil.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, explained that the recent price surge is driven by traders adding a geopolitical risk premium to the cost, even though there is currently no clear impact on the supply. This premium could continue to drive up prices as fresh demand re-emerges, following a significant amount of long liquidation, especially in Brent, the global benchmark.
One of the primary concerns within the market revolves around potential supply disruptions from regions like Iran, according to a report by Saxo Bank. The situation remains dynamic, with oil prices expected to remain sensitive to geopolitical developments in the Middle East.
