The price of oil has jumped 5% after US President Joe Biden said the US was discussing possible strikes by Israel on Iran’s oil industry, BBC reported.
Asked on a visit if he would support Israel striking Iran’s oil facilities, Biden said: “We’re discussing that.”
Iran is the seventh largest oil producer in the world, exporting around half its production abroad, mainly to China.
Since Iran’s missile attack on Israel on Monday, the price of benchmark Brent crude oil has risen 10% to $77 a barrel, although this remains below levels seen earlier this year
Any extended rise in energy prices raises the possibility of higher petrol prices and increased gas and electricity bills, pushing up the rate of inflation.
So far this year, weaker demand from China and ample supply from Saudi Arabia have acted to hold down oil prices.
The reaction in oil markets has, so far, been far more muted than, for example, to Russia’s invasion of Ukraine in 2022.
But the escalation of violence in the Middle East and threat of further action is now stalking the markets.
Of particular concern is whether any escalation could block the Straits of Hormuz, through which a third of oil tanker traffic and a fifth of LNG frozen gas has to pass. (BBC)