Oil Resumes Gain as Israel Prepares for Potential Iran Attack

The recent rise in oil prices can be attributed to renewed geopolitical tensions in the Middle East, specifically between Israel and Iran. On October 26, 2021, reports emerged that Israel was preparing for a possible military strike against Iran or its proxy groups in response to ongoing threats from Tehran. These tensions have caused uncertainty in the global oil market, leading to an increase in crude oil prices.

Israeli officials have reportedly been discussing the possibility of a military operation against Iran's nuclear program or its proxy groups in Lebanon, Syria, or Gaza Strip. The Israeli military has reportedly been putting its forces on high alert and conducting drills in preparation for such an operation.

Iran has been increasing its threats against Israel in recent weeks, with Iranian officials warning of "harsh revenge" if Israel attacks its nuclear facilities. Iran's nuclear program is a major point of contention between Tehran and the international community, with many countries expressing concern over Iran's pursuit of nuclear weapons.

Meanwhile, traders in the oil market are also looking ahead to the release of the monthly report from the International Energy Agency (IEA) on the global oil market's supply and demand outlook. The IEA is expected to provide an update on oil production levels from major oil-producing countries, including OPEC+, which has been implementing production cuts to support prices. The report could provide insight into whether these production cuts are sufficient to offset any potential disruptions from geopolitical tensions in the Middle East.

The Brent crude oil price reached $84.36 per barrel on October 26, 2021, its highest level since October 2014. The West Texas Intermediate (WTI) crude oil price also rose to $84.18 per barrel, its highest level since October 2014. The price increases come despite the fact that global oil demand is still recovering from the pandemic-induced slump, with many countries still experiencing travel restrictions and other measures aimed at controlling the spread of COVID-19.

In summary, the recent rise in oil prices can be attributed to renewed geopolitical tensions between Israel and Iran, which have caused uncertainty in the global oil market. Traders are also looking ahead to the IEA's monthly report on the global oil market's supply and demand outlook for further insight into market conditions.