Oil Markets Wary Amid Israel-Hamas Conflict, Says International Energy Agency

The ongoing conflict between Israel and Hamas is keeping the international oil markets on high alert, warns the International Energy Agency (IEA).

by Faruk Imamovic
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Oil Markets Wary Amid Israel-Hamas Conflict, Says International Energy Agency
© Getty Images News/Tim Boyle

The ongoing conflict between Israel and Hamas is keeping the international oil markets on high alert, warns the International Energy Agency (IEA). While the strife hasn't yet impacted the actual oil supply, the agency predicts that market players will stay on high alert, closely observing any possible disruptions stemming from the Middle East.

In its most recent oil market report, the IEA remarked, “The Middle East conflict is fraught with uncertainty and events are fast developing”. They further highlighted that due to the closely-balanced oil markets they've projected, the global community is keenly watching for any threats to the oil flows from the region.

The war has inevitably intensified the geopolitical risks, and the agency has pledged its commitment to ensure that markets remain stable and well-supplied.

IEA's Strategy Amid Rising Tensions

Should there be any sudden shortage in oil supply, the IEA has a two-fold strategy: encouraging its member countries to either release emergency stocks or put demand restraint measures into play.

It's worth noting that Israel isn't a significant player in the oil production arena, and there's no primary oil infrastructure near the Gaza Strip. However, the broader Middle East region cannot be overlooked, as it is responsible for over a third of the global seaborne oil trade.

The Israel-Hamas unrest has naturally sparked concerns that the turbulence might jeopardize regional energy production. Toril Bosoni, the head of the oil markets division at the International Energy Agency, expressed these concerns in a recent interview.

Speaking to CNBC’s “Street Signs Europe”, Bosoni shared, “The conflict has certainly raised geopolitical tensions in the Middle East... For now, there has been no direct impact on supplies. We’re watching this.

If it spills over and spreads to the wider Middle East, this is, of course, a great concern”. When probed about the possibility of major oil players, such as Saudi Arabia, leveraging oil exports to back Hamas, Bosoni sounded a reassuring note.

She mentioned that the OPEC+ alliance, which includes Saudi Arabia, is committed to ensuring market stability. Bosoni concluded, “Of course, the IEA also has its tools to respond should there be a disruption to supply. For now, that is not something that we’re expecting”.

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