The price of oil heads towards $100 due to the escalation of war between Israel and Gaza

The tense calm with which the markets have coexisted in recent days is coming to an end. Investors have begun to seek refuge in gold, in traditional gold (gold, which surpassed $1,900), but also in black gold, as oil is known, which rises 6% in the week and is on its way to 90 dollars per barrel. Only on Friday its price shot up more than 4%, and the same thing happened with the American West Texas, which exceeded $86. Neither Israel nor Palestine are major producers, but the key to everything is that the conflict gains breadth and crosses borders.

“The Hamas attacks on Israeli territory, ironically coinciding with the 50th anniversary of the Yom Kippur War, have occurred in a period of exceptionally high oil prices and in a completely different industry, but most likely have bullish implications.” on crude oil, and the big question is for how long,” Citi analysts ask.. It is taken for granted that the White House, historically an ally of Israel, will impose new sanctions on Iranian exports. It is the eighth largest oil producer in the world and also a great financial support for Hamas fighters.. The Wall Street Journal assumed a few days ago that Iran had supported the Hamas attack that “had been preparing for many weeks,” according to the newspaper.

This conflict has caught the crude one with a changed step. It had been falling for several weeks due to the expectation of lower demand worldwide. But it could not be. If the conflict escalates to other countries, analysts are clear that the price will skyrocket above $100 because there are fewer and fewer players left in the global oil puzzle.. It must be taken into account that the market was already tense with Russia (and the sanctions imposed due to the invasion of Ukraine) off the map. It is the third largest producer of crude oil, with a tenth of the global share. If Iran now enters the equation, and especially Saudi Arabia – the second largest producer -, this affects another 16% of the total.

But while the market looks at oil, natural gas is what has really imploded. Its price shoots up 53% in six days. And this is because, after Russia, banned from the international scene, Iran, Qatar and Saudi Arabia are among the largest producers and the same pattern is repeated.. The CEO of JP Morgan has dared to warn in a talk with journalists that “it could be the most dangerous time we have seen in decades.”

Iran is one of the flanks involved in the conflict, it remains to be seen to what extent. Another territory to take into account is Saudi Arabia. The last page he had written at the diplomatic level was a principle of agreement with Israel, where Washington acted as a mediator to win one more medal.. But the escalation of war has thrown this option to the ground.. Goldman Sachs, in the least bad scenario, considering that Saudi Arabia “maintains stable its production of 9 million barrels per day in 2024, would cause an increase in the price of Brent to $104” within twelve months. But if the conflict expands, Bloomberg Economics estimates that the repercussions on black gold will be much more noticeable. Its experts calculate crude oil at $150 and a strong recession in the economy, with a drop of 1.7% globally. These are higher prices than those seen in the midst of the 2008 financial crisis, when they reached $140.