Oil pushes higher as US strikes in Syria raise Mideast tensions

Oil advanced as the US conducted strikes on two Iran-linked facilities in Syria, reanimating investor concerns that the Israel-Hamas war may spark a wider conflict and disrupt crude supplies.

Global benchmark Brent rose above $90 a barrel to pare a weekly loss. The US carried out the strikes in response to attacks on American troops, after the Pentagon had announced the deployment of extra military personnel to the region. Iran, meanwhile, held army drills and said the US won’t be unaffected if the conflict widens.

Oil has been roiled since the October 7, Hamas attack on Israel, initially surging on fears of a wider conflict but then paring those gains as the war remained contained and concerns surfaced about the scope for weaker physical demand. The US strikes, believed to be the first offensive action by Washington since October 7, and indications that Israel will launch a ground invasion of the Gaza Strip will keep tensions high in a region that accounts for about a third of global crude supply.

Since the fighting broke out, futures and options markets have been volatile on Fridays, as traders try to gauge how to position ahead of the weekend, with any escalation running the risk of price spikes at the following week’s market open.

“The tense situation in the Middle East is also likely to lend support to the oil price next week,” Commerzbank analysts including Thu Lan Nguyen said. “Attention is focused particularly on Iran, which may decide to intervene in the conflict.”

The Middle East war premium in futures is partially masking a recent slump in prices of some physical barrels, suggesting demand may be weakening. Global stock markets have also fallen this week, while a gauge of the dollar is near the highest since November, increasing the price of commodities for most buyers.

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