London – Oil prices spiked Monday (9) as the conflict in the Middle East escalates. Over the weekend, Hamas launched a shock deadly attack on Israel, which has struck the Gaza Strip, sparking fear of an escalating conflict in the crude-rich region.
Benchmark oil contracts soared more than 5% in some moments. Brent crude oil price reached USD 89 a barrel. The worsening crisis sent shockwaves through global equity markets. Currencies considered safe like dollar, yen and Swiss franc, as well as gold, won strong support as they benefited from their status as a haven investment in times of heightened geopolitical turmoil.
The crisis has fanned concerns about crucial supplies at a time when supply worries are already high owing to Saudi Arabia and Russia’s output cuts. On Sunday (8) representatives from Bahrain, Iraq, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates reaffirmed their commitment to voluntary adjustments to oil production and additional measures in an effort to support market stability.
The rise in oil prices has also renewed fears about the impact on inflation, with energy costs a key driver of spiking prices, giving a fresh headache to central banks as they try to ease up on interest rate hikes to avoid recessions.
Brent crude oil price surpassed USD 122 a barrel in May last year but started on a downward path since until the middle of this year. Last December, it was at USD 85.91 a barrel, and in May it reached one of its lowest levels since late 2021, at an average USD 72.66. It has spiked since, having reached an average of USD 95.31 in September.
*With information from AFP – Any reproduction of this content is prohibited
Translated by Guilherme Miranda
