Israel has carried out “extensive strikes” on Gaza, killing at least 220, according to sources from both Israel and Gaza cited by the BBC. The strikes came as a ceasefire that began in mid-January failed with the warring parties unable to agree on the terms to extend it.
The reignition of the war between Israel and the Palestinian state affects oil prices as there is always a risk of regional escalation in the conflict, notably featuring Iran. This was the case today as well, with Brent crude inching up to $71.29 per barrel and West Texas Intermediate rising to $67.78 per barrel at the time of writing.
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“Israel will, from now on, act against Hamas with increasing military strength,” a statement by Benjamin Netanyahu’s office said. “This follows Hamas’s repeated refusal to release our hostages, as well as its rejection of all of the proposals it has received from US Presidential Envoy Steve Witkoff and from the mediators,” the statement also said.
Hamas, for its part, has called on mediators to intervene and salvage the ceasefire, although it responded to Israel’s strike with accusations of treachery and overturning the ceasefire, the BBC also reported.
The Israel-Palestine war was not the geopolitical factor pushing oil prices higher. U.S. strikes on Yemen earlier in the week also acted as a booster for the benchmarks, highlighting the fragile situation in the world’s biggest oil-producing region.
In addition to geopolitics, news from China also served to prop up oil prices, as Beijing released its latest round of measures aimed at stimulating consumer demand through higher salaries and childcare subsidies. The news was followed by data showing refining throughput in the country had increased over the first two months of the year, and figures suggesting rebounding consumer spending, which are normally taken as a bullish sign for crude oil demand.
By Charles Kennedy for Oilprice.com
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