Oil continues to rise

Oil rose after breaching the $90-a-barrel threshold in the previous session amid rising tensions in the Middle East. Global benchmark Brent rose to $91, its highest since October, while U.S. crude was around $87. Israel stepped up preparations for possible retaliation from Tehran after Monday’s attack on an Iranian diplomatic compound in Syria, raising fears of a wider regional conflict. Crude has risen 18% this year due to geopolitical tensions in the Middle East and Ukraine, as well as OPEC+ supply curbs and healthy demand. The conflict between Israel and Hamas has led to Houthi attacks on shipping in the Red Sea, raising shipping costs, but has so far not escalated into a wider war in the region that accounts for about a third of the world’s oil supply. Ceasefire talks between Israel and Hamas, which include the release of hostages in Gaza, have reached a stalemate. Israel’s economy minister said he did not trust Qatar to mediate on the Hamas issue. “Middle East tensions stemming from the Gaza war are likely at their highest in months. Crude reflects the premium on fears of fires in the Middle East,” said Vandana Hari, founder of Vanda Insights in Singapore. Earlier this week, OPEC+ opted to continue supply cuts in the first half of the year, keeping global markets tight and supporting the prospect of higher prices. A panel of key members led by Saudi Arabia did not recommend any policy changes at an online review meeting. That means output curbs of around 2 million barrels a day will remain in place.