Oil prices on the decline
Oil prices fell as the administration of US President Joe Biden plans to visit Israel this week.
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US crude oil fell to 86 dollars per barrel after closing Monday with a decline of more than 1 percent. Biden will travel to the country on Wednesday to show his support following the Hamas-Israel conflict. Israel is also continuing its plans for a ground offensive into Gaza.
The crude oil market remains tense due to concerns that the sudden crisis in the Middle East faces the risk of spreading beyond Israel and Gaza, potentially endangering crude oil flows from major producers. Iran, which supports Hamas, warned that the expansion of the war is "approaching an inevitable stage." Tehran also supports the Hezbollah militant group in southern Lebanon.
Vishnu Varathan, head of Asia economics and strategy at Mizuho Bank in Singapore, said, "The containment of oil prices is largely dependent on the conflict not spreading to a wider area." He stated that while crude oil reaching 100 to 120 dollars is not the base case, such an increase is a significant and growing risk.
Meanwhile, beyond the region, crude oil investors will be following events in Barbados, where the Venezuelan government may sign an agreement with the opposition on Tuesday. If such an agreement is signed, it could pave the way for the US to ease sanctions on the country and potentially increase oil exports.