Oil prices saw an additional rise on Monday, with Brent crude nearing the $80 mark, continuing last week’s gains, which were the largest since early 2024. The increase was driven by concerns about a potential expansion of the conflict in the Middle East and its possible impacts on exports from the oil-rich region.
Brent crude rose by more than 8% last week, while West Texas Intermediate jumped by 9.1%, fueled by geopolitical tensions in the Middle East. However, the ANZ Research Institute predicted that the impact of any immediate supply disruption would be relatively limited. The institute explained that this is due to the existence of a spare capacity of about 7 million barrels per day among OPEC producers.
OPEC and its allies, known as “OPEC+,” are expected to begin increasing production starting in December after years of production cuts aimed at supporting prices due to weak global demand. According to analysts, OPEC+ has sufficient production capacity to offset any shortages.
It’s worth noting that when the conflict in the Middle East broke out a year ago, Brent crude was priced at $88.15, while current prices are about $10 lower.
In this context, John Evans, an analyst at the oil trading company BVM, commented: “Although the effects of the conflict on oil markets cannot be ignored, global economic factors have played a dominant role in curbing any significant increase in global demand.”
