Israel-Hamas Conflict: Geopolitical Implications and Oil Market Concerns

As oil traders monitor the conflict between Israel and Hamas, their focus is shifting to Iran, a major oil producer and backer of Hamas. While there is no immediate threat to oil supply, a retaliatory strike against Iran or a crackdown on Iranian oil exports by the US could impact prices. The conflict also raises concerns about the Strait of Hormuz, a vital shipping artery that Iran has threatened to close in the past. The recent surge in Iranian oil shipments and the depletion of global crude supplies due to production cutbacks by Saudi Arabia and Russia have already tightened the market. However, the presence of spare production capacity in Saudi Arabia and the UAE may mitigate an immediate price surge.