Increasing oil after Israel’s attack on Iran

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Oil prices rose on Friday in the largest step in more than three years, as Israel’s air strike against Iran threatens supplies throughout the region and raised a rush to the origins of safe haven.

Early in the afternoon in Asia Brent crude, the international standard increased by 8 percent to $ 74.88, and West Texas in West Texas rose by more than 8 percent to $ 73.67, as traders were concerned that the conflict could reach energy supplies in one of the most important areas of oil and gas production in the world.

Michael Alvaro, the chief investment official of Gallo Partners, a hedge fund that focuses on energy and industries, said the attack on Iranian nuclear installations represents a “seismic escalation” in the conflict.

He said: “We are staring at a barrel of a long struggle that is certainly that oil prices are certainly high.”

Gold, which is one of the assets seen as a haven, increased by approximately 1.2 percent during Asian trading hours to $ 3,427 an ounce.

There are multiple risks to the energy sector of a renewed conflict.

The Strait of Hormones, the narrow waterway that separates Iran from the Gulf states, is a channel for about a third of the oil supplies transported in the world. Iran has repeatedly threatened to close it in the event of an attack.

Some of the largest oil fields in the world, including in Saudi Arabia and Iraq, are accessible to missiles and drones in Iran. In 2019, it was widely believed that Iran was behind an attack on Saudi oil facilities, which briefly paid the price of crude.

Qatar is also one of the largest liquefied natural gas suppliers in the world (LNG), and its shipments must cross Hormuz to reach international markets at a time of narrow global supplies.

Hillima Coft, a former CIA analyst who is now working in RBC Capital Markets, asked whether the last strike is a limited military participation, as happened in the fall, or if Iran will target regional energy supplies.

“The main question is whether Iran is seeking to internationalize the cost of work tonight by targeting the infrastructure of regional energy,” Croft said.

US President Donald Trump has previously pledged to maintain low oil prices to help tame inflation.

After Russia’s extensive invasion of Ukraine, the Biden Administration has released about 300 million barrels of crude from the American Strategic Petroleum Reserve (SPR), the largest emergency stock in the world, to help maintain prices under choice.

If the increase in oil prices are prolonged or supplies are broken from the Middle East, Trump can take advantage of SPR, but in the past former President Joe Biden criticized his backup to 40 years in its lowest level. SPR currently contains about 400 million barrels, much less than a 727 million barrel.

Traders will also search for any response from OPEC+ oil producers. The Kingdom of Saudi Arabia, one of the most powerful members of the group, condemned the Israeli attack on Friday.

The group, from which Iran is a member, raises production in recent months, but it may face additional pressure from the Trump administration to take advantage of its additional ability to maintain the markets well.

The shares in the Nikkei 225 nemplasome index fell by about 1.3 percent. South Korea Cubia and Hang Singh in Hong Kong fell 1.28 percent and 0.7 percent, respectively.

Bitcoin price has decreased by 3 percent on Friday in Asia, which matches broad sales of risk assets throughout the region.

The Bitcoin price briefly decreased to the level of $ 103,000, before gathering slightly to 104,000 dollars.