From Gaza to Gasoline: How Uncertainty is the Only Sure Bet in Today’s Oil Markets

As the world grapples with escalating conflicts, market volatility, and socio-political unrest, one thing remains a constant fixture—uncertainty. Oil prices are now skating on ever-thinning ice, following an uneasy period triggered by multiple events on the global stage.

The recent eruption of conflict between Israel and Hamas is yet another testament to the precariousness of global stability. The first market opening since the onset of hostilities saw oil prices surge beyond the $85 mark. Over the past quarter, oil prices have registered a jaw-dropping 27% hike. Add to that, petrol prices at the pump are stubbornly sticking close to $4.00 a gallon. OPEC’s surprise voluntary production cuts have only fanned the flames, with prices peaking at an annual high of $95 per barrel.

The situation in Israel is escalating rapidly. The conflict turned distressingly grave when approximately 260 young Israelis, who were attending a music festival, were killed, escalating the death toll in the country to around 700. Israel’s defence forces are intensifying their focus on the Gaza Strip, preparing to mobilise an estimated 100,000 troops. Amid these circumstances, Israel’s request for ammunition from the United States serves as a potential marker for the possibility of a larger military offensive.

The ripple effects of this geopolitical turbulence are shaking foundations far and wide. The US Federal Reserve, which already has its plate full with a looming inflation crisis, now has to deal with the inflationary pressure mounted by rising oil and gas prices. The unsettling state of Wall Street serves as a glaring example. Dow futures opened approximately 200 points lower in an undoubtedly volatile trading environment.

Unsettling events have not been restricted to geopolitics and finance. Over in the U.S., the Speaker of the House was ousted for the first time in history. Mortgage rates are skyrocketing to levels not seen since the turn of the millennium. Hawaii is ablaze with wildfires devouring 17,000 acres of land. Major automakers like Ford, GM, and Stellantis are not immune either, with unions going on strike, adding to the general tumult.

So, how has this impacted oil prices in the last three months? For starters, global supply has been expected to rise in 2023, primarily contributed by the U.S., Iran, and Brazil. Russian oil exports have seen revenue growth to the tune of $1.8 billion, reaching $17.1 billion in August 2023. Oil prices have also been significantly influenced by OPEC+ decisions, particularly extensions in output cuts by Saudi Arabia and Russia.

Meanwhile, Brent crude oil futures recently settled at $90.92 a barrel, while U.S. West Texas Intermediate stood at $89.23 per barrel. These figures represent a bounce-back from a three-week low, influenced by a cocktail of factors like a stronger U.S. dollar, global economic indicators, and tightening crude supply. The Israel-Gaza conflict further intensifies these dynamics by injecting an additional layer of uncertainty and fear of supply disruptions.

The overall prognosis is anything but rosy. We are looking at a complex ballet of supply and demand dynamics, geopolitical friction, and global economic currents. The ongoing Israel-Gaza saga adds a fresh layer of complexity, heightening the fears of supply disruptions and consequential price upticks. One thing is clear—this roller coaster isn’t stopping anytime soon, and we would all do well to keep our seat belts fastened.



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Maria Irene
Maria Irene
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.


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