As tensions between Israel and Iran continue to escalate, oil futures hit $92 per barrel on Friday (April 12, 2024). Israeli Prime Minister Benjamin Netanyahu has instructed his officials to prepare for a possible attack by Tehran, leading to anxiety in the oil market. The Brent front-month futures contract was trading at $90.72 per barrel, up 1% or $0.96, with prices reaching a session high of $92.12 per barrel.
The latest spike in oil prices is a result of increased tensions following an alleged Israeli air strike in Damascus, Syria on April 1. The attack resulted in the death of 13 individuals, including two Iranian generals and five officers, as well as the destruction of part of Iran’s consulate in Syria. Although Israel has not officially commented on the attack, it is believed to have been the perpetrator.
U.S. officials have warned that Iran may retaliate with more than 100 drones, cruise, and ballistic missiles. As a result, the U.S. has issued a travel warning for Israel to its citizens and restricted the movement of its diplomatic staff in the country. Other countries such as the U.K., France, Australia, and India have also issued similar warnings, with some airlines choosing to avoid Iranian airspace.
Iranian Supreme Leader Ayatollah Ali Khamenei has vowed that Israel “must be punished” for the strike, while Israeli Prime Minister Netanyahu’s office has stated that Israel is prepared defensively and offensively to meet any security needs. Diplomatic efforts are ongoing to prevent an attack on Israel, which could potentially lead to a wider regional conflict in the Middle East.
The initial spark for the current situation dates back to October 7, 2023, when Iran-backed terrorist group Hamas attacked Israeli communities near the Gaza Strip, resulting in numerous casualties and hostages. The conflict has since escalated, with the Israeli Defense Forces responding with force. Additionally, Iran-backed groups in Yemen, Iraq, and Syria have also been involved in attacks on Israeli and U.S. targets.
In response to the escalating tensions, global powers such as the U.S. have engaged with foreign ministers from China, Iraq, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates, urging them to use their influence with Iran to avoid further escalation. The possibility of a wider regional war remains a concern, highlighting the need for diplomatic efforts to diffuse the situation and prevent any catastrophic outcomes.
