Global oil prices have jumped, inflamed by violence in Israel and Gaza.
Over the weekend, militants with Hamas, which governs Gaza and has been designated by the State Department as a terrorist organization, attacked Israel, killing hundreds and also taking hostages.
As of Monday, at least 900 Israelis, most of them civilians, had been killed. More than 560 Palestinians have been killed in retaliation from Israel, ABC News reported, citing Palestinian authorities.
The violence sent oil prices upward.
The price of international oil benchmark Brent Crude closed at under $85 per barrel Friday. On Monday, prices were up to about $88 per barrel.
“Any time you have a conflict in the Middle East, that tends to create a geopolitical risk premium,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies.
“It’s not a huge bounce, but it’s notable because there was a big sell-off in the oil price late last week,” Cahill said.
Oil prices had taken a tumble over the last few weeks, with Brent Crude down from as high as $94 per barrel in late September. That drop came with concerns that the economy could slow down, including because of high interest rates.
Tom Kloza, global head of energy analysis with the Oil Price Information Service, said that he expects oil prices to remain fairly stagnant for the time being, despite the weekend's increase.
“I think we’re going to trade in the 80s for quite a while, and if there’s no expansion of the theater of war, there’s not a real catalyst to take it higher,” Kloza said.
Kloza said that he still expects gasoline prices to fall in the weeks ahead, following a recent decline in oil price before this weekend.
“There’s still somewhere between 20 to 40 cents a gallon in a downtrend to catch up with," he said.
Cahill also said the oil price bump could be short-lived, though the situation really depends on whether Iran was involved in the attack on Israel, and if so, what the global response will be.
“It’s possible that the price bounce could be pretty short-lived, ultimately. We have to wait and see what happens. The big question … is what happens with Iran.”
The Wall Street Journal reported Sunday that Iran helped plan the attack, but a key Biden administration official said Monday that the U.S. government could not corroborate that report.
Deputy national security adviser Jon Finer told "Good Morning America" on Monday that while “Iran is broadly complicit in these attacks for having supported Hamas going back decades,” there’s currently “no evidence of direct support” for this specific attack.
When it comes to oil, whether Iran was involved may be a big difference maker.
Kloza said that if Iran’s “fingerprints show up on this” he expects to see a “war fear premium” ranging from $5 per barrel to $20 per barrel.
Cahill noted that Iranian oil exports have been on the rise since May and have provided some “buffer” to help offset the impacts of Saudi Arabia's ongoing oil production cuts.
“Now, I think there will be a lot of speculation that U.S. sanctions enforcement on Iran will increase if there’s clear evidence that Iran has materially supported Hamas, so what happens next with Iranian exports I think is the key question to watch,” Cahill said.
Brenda Shaffer, a professor at the U.S. Naval Postgraduate School specializing in international energy and foreign policy, said that Israel could attack infrastructure in Iran, which would further drive up oil prices.
“Israel could attack at some point strategic infrastructure in Iran, and that also would raise the global oil price,” Shaffer said.