Oil prices surge amid escalating tensions between Israel, Iran

By Zeynep Beyza Kilic

Oil prices increased on Monday amid news reports that Israel is preparing a major attack on Iran in response to Tehran’s missile attack on Oct. 1.

The international oil benchmark of Brent crude increased 0.4% to $73.13 per barrel at 09.56 am local time (0656 GMT), up from the previous session's close of $72.87.

The US benchmark West Texas Intermediate also rose by 0.5% to $69.09 per barrel, compared to $68.78 at the prior session's close.

Tension between Israel and Iran soared after recent attacks, pushing prices higher.

According to Israeli state television KAN, an Israeli official whose name was not disclosed revealed that Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant will decide in a Security Cabinet meeting later in the day on when and how the attack will take place.

Also, the US obtained leaked classified documents about Israel's retaliation plans against Iran. US President Joe Biden said Friday that he knows how and when Israel will carry out its attack on Iran as Tehran warns it will respond "decisively."

According to the Organization of Petroleum Exporting Countries' (OPEC) monthly report, Iran increased its oil production by 21,000 barrels per day to 3.31 million barrels, which was the highest increase among OPEC members in September.

The possibility of Israel attacking the country supported the upward price movement, feeding the supply concerns among market players.

In addition, analysts expect the contraction in the real estate sector and housing market in China, the world's biggest oil importer, to lessen.

China announced a 25-basis point reduction for 1- and 5-year loan interest rates, which serve as the benchmark interest for corporate loans and real estate loans.

The interest rate decision aims to revive the real estate and credit markets against the contraction in the real estate sector and to ease the burden on individuals and businesses.

The decision is expected to increase optimism regarding future incentive measures in the country and support the recovery of oil demand in China.