Retaliatory strikes against Israel could expand the existing conflict in the Gaza Strip and pose very significant ramifications to global relations as well as oil markets, according to analysts.
"Today is very much a commodity-based rally with some fears of Iran/Israel developments over the weekend," Scott Shelton, a crude futures broker for ICAP in North Carolina, said in an email to his clients, shared with Sputnik News.
The UK-based Brent crude was up $1.17, or 1.3%, to $90.91 per barrel in New York trading by 12:00 p.m. ET (17:00 GMT).
The global crude benchmark lost nearly 2% combined for Monday and Tuesday, but has since pared those losses for a weekly slide of just 0.3%.
Brent’s high for Friday was $92.18, a level not seen since its peak of $92.45 on October 23. If that peak is taken out, then the next comparison would be the $93.79 high reached on October 20.
West Texas Intermediate (WTI), the benchmark for US crude, was up $1.20, or 1.4%, to $86.22 per barrel in New York trading. Like Brent, WTI fell 2% in the first two sessions of this week before paring losses to head towards a weekly decline of 0.7%.
On Friday, WTI hit a five-month high of $87.63, matching its peak from a week ago. If that peak is taken out, then the next comparison for the US crude benchmark would be the $88.29 high reached on October 23.
Crude futures have rallied broadly since the start of 2024, with WTI up 20% on the year and Brent standing 18% higher. Traders are now eyeing the possibility of Brent reaching $100 and WTI $90 between May and June.
"I like the idea of being long-WTI spreads toward the end of the month," Shelton said.
"Being long" refers to adding to bullish bets that prices would go higher.
Disruptions to crude shipments out of the Middle East - both real and perceived - have been steadily pushing oil markets higher since the start of the year. If Iran acts against Israel, it will add fuel to a market already ablaze from geopolitical frictions, analysts say.
Global news networks have been speculating about an imminent Iran attack on Israel with precision weapons since Bloomberg first raised that possibility on Wednesday, citing assessments by US and Israeli intelligence.
US President Joe Biden added to the speculation when he said on Wednesday that he was aware of the threat posed to Israel by Iran.
Biden also said he held a meeting with visiting Japanese Prime Minister Fumio Kishida and sought to address, among a range of issues, the alleged "Iranian threat."
US Defense Department officials told Sputnik earlier this week that they had no information to provide on a possible imminent strike against Israel.