By Adedapo Adesanya
Crude oil extended gains as prices rose by more than $2 per barrel on a report that Iran is preparing to attack Israel again, with Brent increasing by $2.10 or 2.91 per cent to $74.26 per barrel and the US West Texas Intermediate (WTI) up by $2.15 or 3.13 per cent to $70.76 a barrel.
Iran is preparing to attack Israel from Iraqi territory in the coming days, possibly before the US presidential election on November 5.
The attack is expected to be carried out from Iraq using a large number of drones and ballistic missiles as attacking through pro-Iran militias in Iraq could be an attempt by Iran to avoid another Israeli attack against strategic targets in the country.
Israel and Iran have engaged in a series of military strikes, part of broader Middle East warfare set off by fighting in Gaza, the latest came on Saturday as Israel’s military jets struck missile factories and other sites near Tehran and in western Iran in retaliation for the country’s October 1 barrage of more than 200 missiles against Israel.
Iran had said it would use all available tools to respond to strikes carried out by Israel.
This renewed tension raises worries for the market as Iran is a member of the Organisation of the Petroleum Exporting Countries (OPEC) with production of around 3.2 million barrels per day or 3 per cent of global output.
There were worries that Israel could target Iran’s nuclear facilities but it only attacked just military targets near energy facilities and that eased earlier this week. Now, another retaliation could create provocation that would see them attack the infrastructure.
Market analysts noted that damage to air defences on Iran’s energy infrastructure has increased their vulnerability to future attacks.
Prices also continued to gain on reports that OPEC could delay its planned oil output increase as the wider OPEC+ is scheduled to meet on December 1 to decide its next policy steps.
Meanwhile, in China, the world’s biggest oil importer, manufacturing activity expanded in October for the first time in six months, suggesting stimulus measures are having an effect.