Fear of Israeli attacks on Iran drives up oil prices

Oil prices reached their highest level in over a month, amid fears of retaliatory attacks by Israel on Iranian oil installations. Biden responded, “We are in the process of discussing that,” adding “I think it would be a bit… anyway.”

Brent crude, an international benchmark, rose by up to 5 percent, reaching $77.54, its highest level since September 2. It is closing in on $80-mark, which was last attained at the end August. West Texas Intermediate climbed 5.02 percent to $73.62. Shell and BP shares rose by 1.7% and 0.6% respectively, bringing their total market value to £6.5 billion.

According to Opec figures, Iran exported 1,32 million barrels per day of oil last year. Since the beginning of the week the yield on UK government bonds ten years old has been above 4 percent, due to the rising oil price. This raised concerns over inflationary pressures. The price of oil has risen dramatically this week due to fears that the conflict between Israel, Hezbollah and Iran could escalate into a full-scale Middle East war.

Oil was near its two-week low before the Iranian missile attack on Israel. Weak global demand, and the prospect of increased supply overshadowed concerns about the conflict. Opec has agreed to restore about 180,000 barrels a day of production from December after delaying its unwinding by two months.

Israel and the United States both warned Iran on Wednesday of “severe” consequences after Tehran’s military launched almost 200 ballistic rockets at Israel in the largest direct attack against its regional rival.

Gold, which is considered to be a safe-haven asset, has risen $2.68 per troy ounce. It hovers just below the record price of $2.685.

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