File photo of Israeli F-16 fighter jets performing during an air show above the beach in the Israeli coastal city of Tel Aviv, May 5, 2022.
Jack Guez | Afp | Getty Images
Crude oil prices rose on Friday as Israel reportedly prepared for a direct attack by Iran this weekend, in what would be the biggest escalation of tensions in the Middle East since Israel’s war with Iran began. Hamas last October.
THE West Texas Intermediate the contract for delivery in May gained $1.14, or 1.34%, to $86.15 a barrel. June Brent Futures added $1.04, or 1.16%, to $90.79 a barrel.
Israel is preparing for a direct attack by Iran on southern or northern Israel as early as Friday or Saturday, a person familiar with the matter told the Wall Street Journal. A person briefed by Iranian leaders told the Journal that no final decision had been made, although strike plans were under discussion.
Iran’s Supreme Leader Ayatollah Ali Khamenei has vowed to punish Israel for the missile attack on the Islamic Republic’s consulate in Damascus, Syria, last week that killed seven Iranian military officials. Oil prices rebounded after the consulate attack, although futures are down slightly this week as inflation data and U.S. crude inventories weighed on the market.
Bloomberg News reported earlier this week that the United States and its allies consider an attack by Iran or its proxies on military and government targets in Israel “imminent.”
Brent crude oil futures could reach $100 a barrel if Iran directly attacks Israel, according to Bob McNally, president of Rapidan Energy and a former top energy official in the Bush administration. If the escalation results in disruption of the Strait of Hormuz, a key trade route for oil, prices could rise to $120 or $130 a barrel, McNally told CNBC.
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