FE
Prices of crude oil can be trading in the green, again, today as a result of the Israel-Hamas conflict that broke out on Saturday.
However, the uptick in the prices will not be sustained, analysts say, as the country is neither a major oil producing country nor a major consumer.
“Looks like the fighting may drag on for a few days. That may keep prices elevated,” said Vandana Hari, founder and chief executive of Vanda Insights. “But the fear premium will evaporate once it’s determined that the conflict is not drawing in others in the region and oil and gas flows are not impacted,” she said.
“Any geopolitical tension in the world can result in an added speculative risk premium to the prices,” said an analyst who did not wish to be named. Speculative risk is the price uncertainty and the possibility for losses in an investment. Further, if there is any disruption in the shipping routes near the region, oil prices can further rise on the back of longer routes for the delivery, analysts believe.
