Oil Prices Fluctuate Amid Uncertainty Over Israel-Hamas Conflict and Aid Relief in Gaza

Oil prices fluctuate as diplomatic efforts intensify to quell Israel-Hamas conflict and the arrival of aid convoys in Gaza provide temporary relief amid potential supply disruptions in the Middle East.

Oil prices have been fluctuating as concerns grow over the potential for the Israel-Hamas conflict to escalate into a wider war in the Middle East, which could disrupt oil supplies from the region.
Intensification of diplomatic efforts to resolve the conflict, including the U.S. advising Israel to hold off on a ground assault in Gaza and the freeing of Israeli hostages by Hamas, have tempered some investor worries and resulted in a temporary easing of oil prices.
However, continuing Israeli air strikes on Gaza and southern Lebanon, alongside ongoing fighting with Hamas militants, have kept fears of a supply disruption alive, resulting in a rebound of oil prices.
Arrival of aid convoys in Gaza over the weekend, amidst intensified diplomatic efforts, has provided some temporary relief and helped to ease oil prices.
There are looming concerns for the global economy in event of an escalated conflict; EY economist Gregory Daco predicts oil prices could soar by as much as $50 to $150 per barrel in late 2023 if a direct conflict between Israel and Iran erupts.