Oil prices surge to largest weekly gain amid escalating Middle East tensions

Concerns over potential disruptions to oil supply due to escalating geopolitical tensions in the Middle East have driven international oil prices higher for a fourth straight day, resulting in the largest weekly increase in over a year and a half.

West Texas Intermediate crude futures gained 67 cents, or 0.9%, to close at $74.38 per barrel. The weekly gain of 9.1% marks the largest increase since March 2023.

Meanwhile, Brent crude futures rose 43 cents, or 0.6%, to settle at $78.05 per barrel, with a weekly gain of 8.43%, its largest since January 2023.

Earlier in the week, market concerns intensified over the possibility of Israeli airstrikes on Iranian oil facilities, contributing to the upward momentum in oil prices.

Oil prices soared more than 5% after Biden confirmed that the US was in discussions with Israel about the possibility of supporting a strike on Iran's energy facilities on Friday (Oct. 4), local time.

Oil prices surged nearly 2% during the trading session but pulled back sharply after Biden suggested that, if he were in Israel's position, he would consider alternatives to striking Iran's oil infrastructure.

JPMorgan commodity analysts noted that while striking Iran's energy infrastructure may not be Israel's preferred course of action, low global oil inventories suggest prices will remain elevated until the conflict is resolved.

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