HomeEnergyHamas Attack on Israel Rattles Energy Markets: Oil Prices at Risk

Hamas Attack on Israel Rattles Energy Markets: Oil Prices at Risk


After Hamas militants launched a large land and missile strike on Israel from the Gaza Strip on October 7, energy markets worldwide are closely monitoring what unfolds in the aftermath of the attack. There is concern that if the situation gets worse, there will be an increase in the price of oil and petrol.

According to Kang Wu, global head of oil demand analysis at S&P Global Commodity Insights, oil demand reacts mostly to pricing and physical interruptions. Market sentiment could react fast to the tragedy in the Middle East regarding oil prices. According to him, the world demand for oil would not be severely impacted, and it will continue to decline sequentially until the first quarter of 2024, provided that oil prices do not surge and remain at higher levels. Nevertheless, since more flights into and out of Israel have been cancelled, he noted that the impact can still be felt to a certain level.


Israel’s likelihood of engaging in significant retaliation could lead to further escalation of the situation in the Middle East if Iran, Saudi Arabia, and other Gulf producers are drawn into the conflict. In addition, trade between Israel and the Middle East has increased in recent years due to the Abraham Accord, which established relations between Israel, Bahrain and the United Arab Emirates in 2020. According to a Hamas spokesperson cited by local media, the assaults were partly an effort to thwart the gradual normalisation of relations between Israel and certain Arab states.

According to tanker tracking data from S&P Commodities at Sea, Israel has imported approximately 300,000 b/d of crude this year from Turkey, Russia, and Gabon and its largest suppliers because it produces almost no crude or condensate domestically. Israel’s crude product imports have averaged approximately 50,000 b/d during the same time frame.

Israel and the UAE have accelerated their economic cooperation since the signing of a peace agreement in September 2020. In 1994, Israel and Jordan inked a peace agreement.

Israel and the United Arab Emirates—the third-largest oil producer in OPEC—have concluded several commercial agreements following the signature of the Abraham Accords.

In the years following the signing of the Abraham Accords, bilateral economic cooperation between the parties has significantly increased. From $3.6 billion in 2019 to $8.3 billion in 2022, Israeli imports from the UAE more than doubled, as the Bank of Israel reported.

Israel has emerged as a significant natural gas producer in recent years due to the Tamar, Leviathan, and Karish fields. In May of this year, the Israeli government authorised the development of an onshore gas conduit to Egypt, which would allow the export of six billion cubic metres of Israeli gas annually. The estimated cost of the 65-kilometer pipeline, which would stretch from Ramat Hovav to Nitzana on the Egyptian border, is approximately Shekel 900 million ($250 million).

The country’s gas production reached a new record high of 21.9 Bcm last year, as reported by the ministry. The output of Leviathan (11.4 Bcm), Tamar (10.2 Bcm), and Karish (0.3 Bcm) comprised the production.

As domestic Israeli consumption increased to 12.7 Bcm in 2022, exports to Egypt and Jordan increased by 29% to 9.2 Bcm.


Late on October 8, crude futures increased as escalation could imperil production in neighbouring Gulf nations if they were embroiled in the conflict. As a result of the conflict, cargo may be removed from the market, as the United States may impose more severe sanctions on Iran, which has supported Hamas. The unanticipated assaults occurred following a sharp decline in crude futures markets for the week, as concerns about the global economy’s health have resulted in a 10% decline in Brent prices since September 28. In the largest one-day sell-off since September 2022, crude prices fell nearly 6% on October 4 alone, ending a rally that began in June when Saudi Arabia and Russia pledged additional output cuts, pushing prices towards $100/b.

The NYMEX front-month crude price increased by $3.03 to $85.82/b after the opening on October 8, while the ICE front-month Brent price increased by $2.90 to $87.48/b.

Physical Dated Brent was valued at $88.20/b by Platts, an S&P Global Commodity Insights division, on October 6, the lowest price since August 31, 2022.

On October 6, the benchmark Dutch TTF month-ahead natural gas price, as determined by Platts, was Eur38.06/MWh.


Despite the absence of significant oil or gas infrastructure in the vicinity of the Gaza Strip or southern Israel, Israel has been expanding its gas reserves in the Mediterranean Sea.

Israel has made substantial progress in developing its natural gas reserves, which could become a target following the October 7 missile attacks.

Chevron, which operates the significant Leviathan and Tamar gas reserves offshore Israel, announced on 7 October that it will continue to comply with the energy ministry’s directives. On October 7th, Energen, the operator of the Karish field, which began operations in October of the previous year, reported that the Karish field and its dedicated production vessel, the Energean Power, continued to operate normally.

The largest of Israel’s two refineries is the 197,000-unit Haifa facility, which the Bazan Group owns. The 110,000 b/d Ashdod refiner, which the Paz Group owns, was the largest purchaser of Iraq’s Ceyhan oil exports before their March suspension.

The Mediterranean port city of Ashkelon can transport 30 million metric tonnes of petroleum annually.

Tankers up to 350,000 dwt are accommodated at Eilat Oil Port, which has a storage capacity of up to 1.4 million cubic metres. Ashkelon Oil Port has a storage capacity of up to 2.3 million cubic metres and can accommodate cargoes of up to 250,000 dwt.

Frontier India News Network
Frontier India News Networkhttps://frontierindia.com/briefs
Frontier India News Network is the in-house news collection and distribution agency.


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