The barrel of oil is still progressing, heading towards $100?

(Boursier.com) — The rise in black gold prices continues at the start of the month against a backdrop of escalating tensions in the Middle East and constrained production. The global benchmark, Brent (contract for June delivery), climbs 0.5% to $91.1 in London, the highest level since October, while West Texas Intermediate (May contract) advances 0 .4% to $86.9 on Nymex. Israel has stepped up preparations for potential retaliation by Tehran following Monday’s strike on an Iranian diplomatic compound in Syria, stoking fears of a wider regional conflict. And this while Iran, third producer within OPEC, has promised revenge.

Crude has jumped 18% this year due to geopolitical tensions in the Middle East and Ukraine, as well as OPEC+ supply curbs and stronger-than-expected demand. The conflict between Israel and Hamas has resulted in Houthi attacks on shipping in the Red Sea, increasing transportation costs, but has so far not escalated into a wider war in a region that accounts for around a third of the world’s oil supply, recalls ‘Bloomberg’.

Ceasefire talks between Israel and Hamas – which could lead to the release of hostages held in Gaza – remain deadlocked. Israel’s economy minister said he did not trust Qatar to act as a mediator with Hamas, designated a terrorist organization by the United States and Europe. For its part, Washington on Thursday issued its strongest public rebuke of Israel since the start of its war against Hamas, warning that US policy towards Gaza will be determined by whether Israel takes measures to ensure the safety of Palestinian civilians and humanitarian workers.

“Tensions in the Middle East resulting from the war in Gaza are probably at their highest level in months,” Vandana Hari, founder of Vanda Insights in Singapore, told the agency. “Crude oil reflects the fear premium from this Middle East conflagration.”

Earlier this week, OPEC+ opted to stick with its supply cuts for the entire first half of the year, keeping global markets tight and strengthening the case for higher prices. A Saudi-led panel of key members recommended no policy changes during an online meeting. This means that the market will be cut by around 2 million barrels per day until the end of June, at least.