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Oil prices have risen more than 10% this year, and they’re near a six-month high after after Israeli jets dropped bombs on Iran’s consulate in Damascus, Syria.
Brent crude, one of the major global oil benchmarks, is trading at $88.66 a barrel. The airstrike, which killed two major figures in Iran’s armed forces among six others, comes amid fears that Israel’s months-long war in Gaza could escalate into a wider regional conflict.
Israel has not claimed responsibility for the attack.
The Associated Press reports that an Israeli military spokesman made a connection between the airstrike and a drone attack on a naval base in southern Israel.
Iran, which is allied with Hamas, has not directly intervened, but the country has said that the airstrike “will not go unanswered.”
Until now, oil markets have been relatively sanguine about Israel’s war in the Hamas-controlled Palestinian territory after the group’s October attack that killed 1,200 Israelis.
Near the onset of Israel’s retaliation, S&P Global suggested that “the eruption of war between Hamas and Israel in the Middle East puts further upward pressure on our global assessment of geopolitical risk that we already view as elevated and worsening.”
The key risk, the firm said, would be an energy shock. If Iran were to cut oil exports, that could send prices up if the likes of Saudi Arabia didn’t compensate with higher production.