On Monday, oil prices rose slightly following Israel's airstrike launch in Beirut, Lebanon, ending their target, the Hezbollah leader.
Specifically, CNBC shared that the oil market did not react dramatically with the global benchmark. Brent crude oil only rose by 1.56% or $73.10 per barrel, and US West Texas Intermediate futures increased by 1.09% or 68.19 per barrel.
Oil market expert Andy Lipow told CNBC that no disruption are expected to oil supplies because the market also did not expect a massive war between Iran and Israel, which will affect the availability of oil. With this, investors are not overly concerned with immediate oil supply issues.
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Oil Price Over Middle East Conflicts
Last year, despite the Hamas-Israel conflict, oil prices did not react sharply due to factors such as increased oil production from Canada, Guyana, and the US. This came with a slow demand from China and delayed production cut plans by OPEC+.
Now, the death of Hezbollah's leadership will affect oil supplies, but no direct impact has been recorded so far. According to Reuters, it may be due to the oil market not anticipating additional risks related to oil supply disruptions.
However, an intense conflict for the following days will lead oil prices to go up to $100 per barrel, particularly if the Straits of Hormuz face closure. Considered a massive risk by CNBC, experts estimate that such an event will increase oil prices to $30 per barrel.
Any disruptions to the Iranian oil supply or experts coming through the Strait of Hormuz will be a considerable risk to the now-stable oil price. Not only that, it may also cause delays in global oil trade since it accounts for over 20% of daily oil production and links Middle Eastern oil producers to international markets.
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