Commodities Week Ahead: Oil in Wary Trading, Eyes Iran Role in Mideast War
That one of the world’s fiercest wars now is being fought right next some of the biggest oil exporters probably justifies some geopolitical risk to be attached to crude prices. But a daily move of up to a few percent will require the supply of oil itself to be impacted — not just hypothetically but in real barrel terms.
On that front, the nine-day-old Israel-Hamas war has not directly impacted crude production and exports in a material way to keep prices running higher. But there’s something else that could change the equation — the entry of Iran, the world’s fifth largest oil exporter, into the fray.
From the hours after the initial Hamas attacks on Israel that ignited the war, Tehran has been vociferous in its support of Hamas. While the connection between the Islamic Republic and the Palestine militant group is known to all, both Israel and the United States have stopped short of accusing Iran of being directly responsible.
Israel’s ambassador to the United Nations, Gilad Erdan, claimed knowledge on Sunday of meetings in Syria and in Lebanon by Iran and its proxies to help plan the attacks. Hamas itself has publicly acknowledged receiving support from Iran.
But key US officials — from Secretary of State Antony Blinken to Treasury Secretary Janet Yellen and Deputy National Security Adviser Jon Finer — were all at pains to say that Iran did not appear to be directly involved.
Their assessments of the US officials are most important to the oil market. The one catalyst for even higher oil prices now is disruption in Iranian supplies. The United States has ongoing sanctions on Iranian oil but hasn’t been enforcing them for more than a year now in order to offset some of the impact of OPEC production cuts that have been
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