Geopolitical Fears Fuel Oil Price Spike

10 Oct 2024 , 10:01 AM

Oil prices surged in early Asian trade on Thursday, driven by fears about potential supply disruptions in the Middle East, with Israel threatening to strike Iran, as well as spikes in fuel demand as a large hurricane approached Florida.

Investors were also concerned about a potential escalation in hostilities between Israel and Iran, with Israeli Defence Minister Yoav Gallant pledging a “lethal, precise, and surprising” Israeli strike on Iran.

Brent oil prices increased 37 cents, or 0.5%, to $76.95 per barrel, while U.S. West Texas Intermediate (WTI) futures rose 35 cents, or 0.5%, to $73.59 per barrel.

The world’s top oil producer and consumer has been battered by a second significant storm, Hurricane Milton, which made landfall on Florida’s west coast, causing tornadoes and seawater surges.

The storm has already increased demand for petrol in the state, with about a fifth of fuel outlets running out of supplies, bolstering crude prices.

In a 30-minute discussion on Wednesday, US President Joe Biden discussed Israel’s intentions for Iran with Israeli Prime Minister Benjamin Netanyahu, which the White House hailed as “direct and very productive”.

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