Rose 2-3% then Slightly Fell
Safe Haven Gold Price Also Exceeds $2000
As Israel deploys ground forces to eliminate the Palestinian militant group Hamas amid ongoing conflict, the situation in the Middle East has worsened, increasing volatility in international oil prices. With the possibility of the conflict spreading throughout the Middle East, concerns about a shortage in crude oil supply are spreading. The price of gold, a safe-haven asset, has also surged to its highest level since the outbreak of the conflict.
On the 29th (local time), Brent crude oil for January delivery, the international oil price benchmark, traded on the London ICE Futures Exchange, was priced at $88.63 per barrel (as of 9:50 a.m. Korean time on the 30th), down 0.63% from the previous session. West Texas Intermediate (WTI) crude oil for December delivery on the New York Mercantile Exchange (NYMEX) also fell 0.85% to $84.81 per barrel.
Following Israel’s announcement of the start of ground operations on the 28th, international oil prices surged 2-3%, but the recent price decline is analyzed as a result of cautious trading after the sharp rise. Since the war, triggered by Hamas’s large-scale civilian terror attack on the 7th, has escalated into Israeli retaliation and there are expectations that the conflict may spread to surrounding Arab countries, volatility in international oil prices has increased.
On the 26th (local time), residents in Khan Yunis, Gaza Strip, are searching for survivors amid the rubble of buildings. [Image source=Xinhua News Agency]
However, experts predict that the upward trend in oil prices is likely to continue in the long term. Giovanni Staunovo, a commodities analyst at UBS Group, told Bloomberg News, "Concerns over escalation are increasing the risk of rising international oil prices," but added, "Since there have been no reports of actual disruptions in oil supply since the outbreak, oil prices are likely to receive upward support until early this week."
As Israel entered the ground combat phase over the weekend, showing signs of intensifying the war, Iran, which had previously distanced itself from Hamas, warned Israel of crossing the "red line" and threatened retaliation, casting a shadow over the Middle East situation. Clashes have already occurred in border areas such as Syria and Lebanon, and provocations by Lebanon’s militant group Hezbollah have further heightened trade instability.
There are also forecasts that a global oil price shock could occur if the worst-case scenarios unfold, such as Iran’s direct involvement or the closure of the Strait of Hormuz, a critical global oil shipping route. Professor Berkeley Haas of the Haas Energy Institute at the University of California, Berkeley, said, "Uncertainty is increasing too much. The situation could change very rapidly." With casualties on both sides approaching ten thousand, some analysts expect that even if the situation does not escalate into a full-scale Middle East war, oil price volatility will remain high until the end of the year.
Investors are betting on further price increases. Bloomberg News reported, "There is a rapid influx of buying interest in call options that expect oil prices to rise above $100 per barrel."
Amid concerns over escalation, the preference for safe-haven assets has strengthened, pushing gold prices higher. On the Singapore Gold Exchange, the spot price of gold rose 0.83% from the previous session to $2,014.95 per ounce as of 10 a.m. Korean time, surpassing $2,000. This is the highest level in three months since July ($1,919.60). Since the outbreak of the Israel-Palestine war on the 7th, gold prices have risen more than 9% to date.
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