On Friday, oil prices surged following reports of an Israeli attack on Iran, causing market turbulence and raising fears of potential disruption in Middle Eastern oil supply.
In the Asian afternoon session, Brent futures for June contracts increased by 0.38% to $87.44 per barrel. Furthermore, West Texas Intermediate (WTI) climbed by 0.46% to $83.11 a barrel.
Meanwhile, sources noted that Israel conducted an assault on Iranian territory on Friday, marking the latest escalation in tensions between the two nations.
On the other hand, according to Iranian media, there were reports of explosions, which an Iranian official attributed to air defense systems. State media additionally reported the downing of three drones over Isfahan.
An analyst noted that at this point, rising geopolitical risk premiums create a risk-off atmosphere, with an increased likelihood of short-term oil supply disruption.
Furthermore, extended escalation implies that the back-and-forth retaliation between the two parties will continue for an extended period.
Moreover, an Iranian counterattack carries significant risks of expanding the conflict regionally and potentially endangering some oil supplies. Crude prices may remain supported as tensions escalate.
Iran deployed numerous drones and missiles in response to a suspected Israeli strike on its Syrian embassy compound. Most were intercepted before reaching Israel, resulting in minimal damage.
Meanwhile, investors awaited Israel’s response, expecting moderation due to international pressure, easing oil price risks.
Venezuela Oil Sector Braces for US License Loss
Following the US announcement to reinstate stringent restrictions on Venezuela’s oil sector, the nation braced for the fallout.
Furthermore, President Nicolas Maduro warned of repercussions for US interests.
Meanwhile, US officials disclosed on Wednesday the revocation of a pivotal license permitting Venezuela to export oil freely and boost investments in its crude industry.
The revocation of the license is expected to affect Venezuela’s oil and fuel sales, leading to an increase in requests for individual deal authorizations.
Moreover, Washington had conditioned the renewal of license 44 on Maduro’s implementation of an electoral roadmap agreed upon with opposition leaders last year.
The Venezuela President has criticized the Biden administration for carrying out its blackmail threat, reiterating Venezuela’s commitment to pursue its path.
