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Bloomberg

Oil surged as the market braced for the possibility that Israel’s retaliation against Iran for its recent missile barrage will include strikes on the country’s oil industry.
West Texas Intermediate soared about 4 per cent to around US$73 a barrel after US President Joe Biden was asked if he would support Israel striking Iran’s oil facilities.
“We’re discussing that,” Biden responded. “I think that would be a little – anyways.”
The White House did not respond to multiple requests for comment on Biden’s statement. Biden also said he was not expecting Israel’s retaliation to come on Thursday.
Both WTI and global benchmark Brent crude spiked to the highest intraday prices in about a month after the exchange.
The oil market has been transfixed by the latest crisis in the Middle East, which comes after a year of turmoil in which Israel has faced off against Iran and its proxies in Gaza, Lebanon, Yemen and elsewhere.

The region accounts for about a third of global supply, and traders are concerned that the latest escalation could hit flows if energy facilities are attacked or supply routes are blocked.
“The fact that energy infrastructure is now considered a potential target isn’t entirely surprising to the market, but hearing comments from Biden about it brings the possibility closer to reality,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.
“There has been some scepticism around whether Israel would actually target oil facilities, largely due to the influence of the Biden administration, which is keen on keeping oil prices stable ahead of the upcoming elections.”
A major strike by Israel on Iran’s export capacity could take 1.5 million barrels of daily supply off the market, Citigroup Inc. analysts including Francesco Martoccia said in a note on Wednesday. If Israel struck minor infrastructure, such as downstream assets, 300,000 to 450,000 barrels of output could be lost, the analysts said.
Oil investors are also preparing for more volatile moves in the days ahead as algorithm-driven traders, who have come to dominate daily market activity, react to developments in the Middle East.
While much of crude’s recent gain has involved speculators unwinding their record bearish positions, some are now finally making bullish wagers, traders said.


The latest price spikes caused a gauge of Brent’s implied volatility to surge to the highest in almost a year. Trading of bullish Brent call options hit a record on Wednesday, led by contracts at US$100 a barrel.
Beyond the crisis, there are signs of ample supplies. Opec+ plans to restore some of its shuttered capacity, with increases set to start in December after a two-month delay. Libya resumed oil production, returning hundreds of thousands of barrels a day, after a political stand-off in the country eased.
In the US, meanwhile, official data showed crude inventories unexpectedly rose by 3.89 million barrels last week, the biggest increase in about five months.
“Markets have been artificially tightened because Opec+ is holding something like 6 million barrels a day of spare capacity from the market, and they have a plan to bring it back even if they might keep pushing it back,” Citigroup’s Eric Lee told Bloomberg Television on Thursday.
“With that plan in place, with so much oil potentially overhanging the market, I think it’s capped, provided a bit of a soft ceiling to where prices can go.”


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Middle East

Oil soars on Biden remarks about possible Israeli strike on Iran facilities

A gas flare on an oil production platform is seen alongside an Iranian flag in the Gulf in July 2005. Photo: Reuters

People look at the remains of an Iranian missile in the Negev desert near Arad on Thursday, after an Iranian attack on Israel. Photo: AFP

Deadly strike on central Beirut after Israel and Iran exchange threats

People inspect damage from an Israeli strike on central Beirut’s Bachoura neighbourhood. Photo: Reuters

Lebanese soldiers and local residents inspect a damaged building following an Israeli strike in central Beirut’s Bachoura neighbourhood. Photo: EPA-EFE

The site of an Israeli air strike in Dahiyeh, a southern suburb controlled by Hezbollah in Beirut, Lebanon. Photo: AP

A wounded Israeli soldier being transferred to a medical centre in Safed, northern Israel. Photo: Xinhua

An Israeli Apache helicopter fires a missile towards southern Lebanon on Wednesday. Photo: AP

Part of a rocket, launched during Iran’s strike against Israel, in the West Bank city of Jericho. Photo: AP

Biden seeks to deter Israel from striking Iran’s nuclear sites

People take pictures near the remains of an Iranian missile in the Negev desert near Arad, Israel. Photo: AFP

Iranians burn an Israeli flag during a rally in Tehran. Photo: AFP

Iran’s main nuclear facilities, long in Israel’s sights

Iran’s Natanz nuclear facility, south of the capital Tehran, January 8, 2020. File photo: Maxar Technologies via AFP

Iran’s Bushehr nuclear power plant,  November 10, 2019. File photo: AFP 

Inside the Fordow uranium conversion facility. File photo: Atomic Energy Organization of Iran via AFP

Iran’s nuclear site in Isfahan, Iran, April 4, 2024. Photo: Planet Labs PBC via AP

News

World

A major strike by Israel on Iran’s export capacity could take 1.5 million barrels of daily supply off the market


A major strike by Israel on Iran’s export capacity could take 1.5 million barrels of daily supply off the market.
