Oil Prices got very high after the Israel-Palestine war in 2023. But first note that there are several factors that could have contributed to an increase in oil prices:
1. Regional instability: Any conflict or tension in the Middle East, which is a major oil-producing region, can impact global oil prices. The Israel-Palestine war may have caused concerns about the overall stability in the region, leading to potential disruptions in oil production and supply.
2. Disruption of oil infrastructure: In times of conflict, there is a possibility of damage to oil infrastructure such as pipelines, refineries, and shipping facilities. If the war resulted in the destruction or temporary closure of important oil infrastructure in the region, it could have caused a decrease in oil production and supply, leading to higher prices globally.
3. Market speculation: The uncertainty surrounding the conflict and its potential implications on oil supply can trigger speculative trading in the oil market. Speculators may anticipate higher oil prices in the future and buy oil contracts, which can further drive up prices.
4. Geopolitical tensions and risk premium: The Israel-Palestine conflict could have escalated geopolitical tensions in the region. Concerns about broader conflicts or disruptions originating from the war could have led to the pricing of a "risk premium" in oil markets. Investors and traders may have factored in the potential for future conflicts or disruptions, leading to higher prices.
Brent crude, the international benchmark, climbed by 2.25 Dollars a barrel to 86.83 Dollars, while US prices also rose.
Deven Choksey, MD at KRCHOKSEY SHARES said that US ensures that they have opened their oil reserves to cool down the oil prices in case they go beyond 10-12 percent to control inflation in US and also. Because US don't want Russia to benifit from higher crude oil prices he noted.
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