Crude oil prices have begun to ease up after a nearly $4 per barrel spike on Monday following the Hamas attack on Israel and escalating tensions in the Middle East.
The price of Brent crude oil shot up to $88.15 per barrel on Monday before retreating to $87.66 by Tuesday afternoon—but still substantially below the $94.36 per barrel that was witnessed on September 27.
WTI prices were also starting to ease on Tuesday, trading at $85.95 (-0.51%) at 2:51 pm ET.
Oil prices rose on Monday after the Hamas attack on Israel over the weekend that spooked the markets and gave rise to speculation that the United States could act to clamp down on Iranian oil exports, which have continued to flow to a significant degree despite U.S. sanctions.
Absent any immediate action from the United States to squeeze Iran further or even officially tag Iran for suspected involvement in the attacks, the markets managed to breathe a somewhat shallow sigh of relief, allowing prices to ease—even if only a bit. The Biden Administration faces scrutiny over its handling of the Israel and energy situation, caught between acting definitively with Iran and making sure not to rattle oil markets even more, sending prices even higher with the threat of less Iranian oil supply.
While oil prices began to sink on Tuesday, they are still elevated, and Saudi Arabia could feel more pressure to relax its production curbs, which have kept prices already higher than they would have been without the restrictions. If the Biden Administration does move to enforce its existing sanctions on Iran’s crude oil supply, Saudi Arabia will feel even more pressure to ease its production cuts.
WTI was trading at $85.92 per barrel at 3:04 pm, ET, with Brent trading at $87.59 per barrel.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.