Crude oil prices experienced a significant jump on Thursday, rising more than 3%, fueled by mounting concerns over potential supply disruptions in the Middle East and domestic disruptions caused by Hurricane Milton. The spike in prices coincides with Israel’s escalating military actions in Lebanon and the anticipation of potential retaliatory strikes from Iran should Israel target Iranian oil sites.
West Texas Intermediate (WTI) crude, a benchmark for US oil, surged by 3.5%, reaching $76 per barrel, adding to its already impressive 11% gain for the month. With 15 trading days left in October, the month is poised to be the strongest for oil prices in over a year.
The heightened tensions in the Middle East have triggered urgent diplomatic efforts to prevent further escalation. Gulf nations, including Saudi Arabia, the United Arab Emirates, and Qatar, are actively lobbying the US to deter Israel from launching attacks on Iran’s oil infrastructure. These nations fear that any Israeli action could provoke retaliatory strikes from Iran’s allies, potentially targeting oil facilities in the Gulf region.
Furthermore, Gulf countries have refused to allow Israel to utilize their airspace for any potential military operations against Iran, aligning with earlier warnings from Tehran, which threatened retaliation against any nation providing airspace access to Israel.
The conflict between Israel and Hezbollah took a dangerous turn on Thursday evening as Israeli airstrikes in Lebanon resulted in the deaths of 18 individuals and injuries to at least 92, with reports indicating that a senior Hezbollah figure was targeted in the attacks. This escalation has further strained diplomatic relations between Israel and Italy following incidents where Israeli forces fired upon UN peacekeeper positions in southern Lebanon.
On Thursday, Israeli tank fire aimed at a watchtower injured two Indonesian peacekeepers, and a separate incident resulted in damage to two Italian bases. Italian Prime Minister Giorgia Meloni condemned the attacks as “unacceptable,” while Defense Minister Guido Crosetto labeled the act a potential war crime.
The United Nations Interim Force in Lebanon (UNIFIL) rejected Israel’s proposal to relocate UN peacekeepers 5 kilometers north. The European Union and other UNIFIL-contributing nations, including Spain and France, have strongly condemned the attacks, emphasizing Israel’s responsibility to protect UN peacekeepers. France and Italy are scheduled to hold a videoconference next week with European countries involved in the mission to discuss the escalating situation.
The United States has also expressed concern over the growing instability in the region as diplomatic efforts to de-escalate tensions continue.
