Brent Crosses $90/b Amid Geopolitical Risks

Brent crude has crossed the $90/b level as the oil complex continues to see a geopolitical risk premium due to the intensifying conflict in between Israel and Hamas and fears of further escalation.

• Brent DEC 23 up 5% at 90.27$/bbl
• WTI NOV 23 up 5% at 87.08$/bbl
• Particularly of concern if the possibility of the conflict spreading and involving Iran.
• The weekend attacks risk retaliation towards Iranian oil infrastructure as well as the potential for US sanctions against it to be further tightened.
• Whether the US tightens the implementation of sanctions on Iran could remove up to 0.5m b/d of Iranian oil from the market, Vandana Hari, Founder of Vanda Insights told CNBC.
• Headlines on Wednesday suggested Iran was unaware of the attacks, prompting a sell off which has since reversed as Israeli retaliation intensifies.
• The conflict has also halted any possibility of a US-backed normalization deal between Israel and Saudi Arabia. Reuters reported Oct. 13 that Saudi Arabia was putting the plans on ice due to the escalation. There was some hope that a deal could bring Saudi Arabia to end its voluntary output cut of 1m b/d early.