Title: Oil Markets Expected to Withstand Hamas Attack on Israel, Say Experts
Date:
In response to the recent attack on Israel by Palestinian militants Hamas, energy experts predict that the overall impact on oil markets will be limited, as long as the conflict does not escalate further. Despite the attack occurring in a key oil producing region, both Israel and Palestine are not major players in the oil industry, analysts caution.
Vandana Hari, CEO of Vanda Insights, anticipates a temporary surge in crude prices when markets open on Monday, but believes this knee-jerk reaction will subside. “There will be some risk premium factored in as a default until the market is satisfied that the event is not setting off a chain reaction and Mideast oil and gas supplies won’t be affected,” Hari stated.
The invasion carried out by Hamas militants, deemed a terrorist organization by the US, EU, and UK, involved infiltrating Israel via land, sea, and air during a major Jewish holiday. Prior to this, thousands of rockets were fired into Israel from Gaza by Islamist militants. Israeli Prime Minister Benjamin Netanyahu reported that civilians, including women, children, and the elderly, have been abducted and killed in their homes.
Iman Nasseri, Middle East managing director of energy consultancy Facts Global Energy, warns that the oil price impact will remain limited unless the conflict escalates into a regional war, with the direct involvement of parties such as the US and Iran. French businessman and hedge fund manager Pierre Andurand argues that since the Levant region is not a major oil producer, the current conflict is unlikely to have an immediate impact on oil supply.
Israel possesses two oil refineries with a combined capacity of nearly 300,000 barrels per day; however, the country has limited to no crude oil and condensate production, according to the US Energy Information Administration (EIA). The Palestinian territories also do not produce any oil, as stated by EIA data.
While global oil inventories are low and production cuts by Saudi Arabia and Russia are expected to lead to further drawdowns in the coming months, Andurand anticipates that a significant oil price spike is unlikely in the short term.
Vandana Hari cautioned that the ongoing Israeli-Palestinian conflict has the potential to escalate into regional hostilities. Lebanon’s Hezbollah militant group confirmed on Sunday that it had launched attacks on three sites in the Shebaa Farms, an area located in the border regions of Lebanon, Syria, and the occupied Golan Heights. In response, the Israeli Defense Force confirmed retaliatory strikes against Hezbollah terrorist infrastructure.
As the situation unfolds, experts remain watchful of any developments that could have a larger impact on oil markets. For now, the consensus is that the conflict, while tragic, is not likely to significantly disrupt global oil supply and prices.