Hamas Attack on Israel Boosts Oil & Energy Giants
Hamas-Israel Conflict
Militant Palestinian Group Hamas, which is a designated terrorist organization by the US and other countries launched a deadly and multipronged attack on Israel on Saturday, reigniting Middle East conflicts. US President Biden "unequivocally" condemned the "appalling assault" [1], while EU Commissioner von der Leyen stood with Israel, which she said has "the right to defend itself - today and in the days to come". [2]
Israel's security cabinet approved a "war situation" [3] and the defense forces retaliated with the large-scale military operation Swords of Iron [4]. The US Defense Secretary Lloyd Austin sent aircrafts and ships close to the region. [5]
Attention has now turned to Iran, for potential involvement in the attack. According to the Wall Street Journal, Hamas members said that Iranian officials helped plan and approved the strike [6]. Speaking on CNN's State of the Union, US Secretary of State Antony Blinken said that "in this specific instance, we have not yet seen evidence that Iran directed or was behind this particular attack" [7]. Regardless of whether there was involvement and to what extent, a lift of sanctions on Iranian oil becomes harder.
Market Reaction
Market reaction to the Hamas-Israel conflict was immediate. USOil rises today, as the events can affect supply and demand of oil and Iran's return prospects, although it is early to assess the full impact. The events unfold at a time when supply is tight and inventories dwindle, due to the massive OPEC+ cuts. On the other hand, there are fears around demand as China's recovery is failing, while the US Fed is pushing the higher-for-longer narrative.
Energy giants like BP (BP.uk) and Shell (SHEL.uk) also opened higher. Major airliners such as Lufthansa (LHA.de) and Ryanair (RYA.ie) which is one of my stock to watch in Q4, drop at the start of today's trading, as they already face increasing fuel costs.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 09 Oct 2023 https://www.whitehouse.gov/briefing-room/statements-releases/2023/10/07/statement-from-president-joe-biden-condemning-terrorist-attacks-in-israel/ | |
| Retrieved 09 Oct 2023 https://twitter.com/vonderleyen/status/1710777462391443590 | |
| Retrieved 09 Oct 2023 https://www.gov.il/en/departments/news/spoke-war081023 | |
| Retrieved 09 Oct 2023 https://twitter.com/IDF/status/1710580568302223374 | |
| Retrieved 09 Oct 2023 https://www.defense.gov/News/Releases/Release/Article/3551716/statement-from-secretary-lloyd-j-austin-iii-on-us-force-posture-changes-in-the/ | |
| Retrieved 09 Oct 2023 https://www.wsj.com/world/middle-east/iran-israel-hamas-strike-planning-bbe07b25 | |
| Retrieved 02 May 2024 https://www.state.gov/secretary-antony-j-blinken-with-dana-bash-of-cnns-state-of-the-union-3/ |
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