- Oil trades higher with the US trying to contain the Israel-Hamas conflict
- November ’23 WTI gained 42c this morning to trade around $88.11/Bbl
- Last week, WTI gained $4.90 and Brent $6.31 amid rising tensions in the Middle East, especially a potential ground offensive in Gaza, raising fears of disrupted crude supplies
- On Saturday, US Secretary of State Antony Blinken communicated with Middle Eastern leaders, including those from Saudi Arabia, Qatar, and Kuwait, to contain the Gaza crisis
- However, Iran's Foreign Minister warned that conflict might escalate if Israel persists with its ground offensive, especially with the Iranian-supported Hezbollah
- Additionally, last week, the U.S. sanctioned owners of tankers carrying Russian oil above the G7's $60/Bbl cap to tighten revenue loopholes for Moscow
- US tries to contain the Gaza crisis | Further sanctions on Russia and Iran pose more supply risks (Bloomberg)
- On Sunday, the US, through back-channel talks, warned Iran about escalating tensions, acknowledging the possibility of intervention through Hezbollah
- On the war front, Israel prepares for a major offensive by mobilizing 300,000 reservists; meanwhile, the US seeks Qatar's influence to prevent Hezbollah from opening a second war front
- Increasing sanctions on Iran and Russia simultaneously poses a political tightrope for President Biden as the 2024 election approaches
- Although the US Treasury mulls actions against Iran due to its ties with Hamas and Russia for breaching the G7 price cap, combined, they represent 13% of global oil supply, underlining potential supply risks
- As Iran's oil exports surge by 1.5 MMBbl/d and with the Saudi-Russia alliance strengthening, the US is in a tough spot as sanctions could lead to higher fuel prices