Oil Market is Predicted to Witness Impact of Israel-Hamas Conflict

October 18, 2023

Crude oil prices are expected to see a spike on Monday due to the attack on Israel by Palestinian militants Hamas. However, the overall impact is anticipated to be limited unless the conflict escalates further.

Hamas militants infiltrated Israel by land, sea, and air, firing thousands of rockets from Gaza. This resulted in civilian casualties and abductions. Israel has initiated an offensive phase, with Prime Minister Benjamin Netanyahu vowing to retaliate. Both Israel and Palestine are not major oil players, but the conflict is situated in a significant oil-producing region. The potential for the conflict to expand into a regional war is a concern for oil markets.

Oil and gas market growth

As per a report from MarketsandMarkets, the global oil & gas security market size is expected to grow from USD 34.5 billion in 2021 to USD 40.6 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 3.3% during the forecast period.

How this conflict can impact Oil & Gas Industry?

While Israel and Gaza are not major oil producers, the conflict can potentially disrupt supply routes. For instance, concerns might arise about the safety of oil shipments through the Suez Canal, a key chokepoint in global oil trade.

Iran's oil exports have been affected by U.S. and international sanctions in the past. The dynamics of the Israel-Hamas conflict can influence international diplomatic stances, potentially impacting decisions on sanctions, waivers, and Iran's oil export capabilities.

Recent oil price increase related to Strait of Hormuz

In 2019, several oil tankers were attacked in the Gulf of Oman, near the Strait of Hormuz. While no party officially claimed responsibility, the U.S. blamed Iran for the attacks. In the same year, Iran shot down a U.S. drone, claiming it had entered Iranian airspace. These incidents heightened tensions in the region and led to concerns about the safety of oil shipments through the strait, contributing to upward pressure on oil prices.


MarketsandMarkets Industry News Desk

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Concerns might arise about the safety of oil shipments through the Suez Canal, a key chokepoint in global oil trade.


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