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Following Hamas' surprise attack on Israel on Saturday, oil traders said that crude oil prices will remain supported in the near term. Traders focused on Iran's role in Hamas' attacks and the country's potential impact on global oil exports.

The clashes could also disrupt talks between Saudi Arabia and Israel aimed at normalizing bilateral relations, which could also have consequences on the markets.

"While there is no direct impact on supply in the short term, it is clear that developments in the next 24 to 48 hours could change how things play out," said Phil Flynn, Analyst at Chicago-based commodities firm Price Futures Group, MarketWatch reported.

Brent crude oil futures gained more than 3% after the clashes on Sunday. US stock markets, on the other hand, fell in the futures market. Gold and the US dollar, traditional safe havens, gained value in global markets after the clashes broke out.

According to the information compiled by, the clashes between Israeli forces and Iran-backed Hamas militants entered its third day. While Israel's airstrikes on Gaza continue, clashes with Hamas militants continue in the south of Israel. While at least 700 people were killed on the Israeli side as a result of Hamas attacks, 436 people, including 91 children and 61 women, have lost their lives in Gaza since 3 days.

The Wall Street Journal reported that Iranian security officials helped Hamas plan the attack. US officials have said they have seen no evidence of Iranian involvement, the report said.

"Iran remains a very big wild card and we will be watching how strongly Israeli Prime Minister Netanyahu blames Tehran for facilitating these attacks by providing Hamas with weapons and logistical support," Helima Croft, Head of Global Commodity Strategy at RBC Capital Markets, said in a note published Sunday morning.
Croft said Iran's crude oil exports have increased in recent years, which he attributed to the Biden administration's soft approach to sanctions enforcement. Some analysts estimate Iran's crude oil production at more than 3 million barrels a day and exports at over 2 million barrels a day. According to the WSJ, these are the highest levels since the Trump administration withdrew from the US nuclear deal with Iran in 2018. Iran's oil sales dropped to 400,000 barrels a day in 2020 as the US reimposed sanctions on Iran.

Hedge fund manager Pierre Andurand, one of the world's most important energy traders, said in a social media post that a major price increase for oil is unlikely in the coming days, but emphasized that the market is focused on Iran.

"In the last six months, we have seen a very large increase in Iranian supply due to weak enforcement of sanctions. Since Iran is also behind Hamas' attacks on Israel, there is a high probability that the US administration will start enforcing these sanctions on Iran's oil exports more stringently. This will further tighten the oil market. And the likelihood that this will lead to a direct confrontation with Iran is not zero."
The WSJ reported late Friday that talks between Saudi Arabia and the White House indicated that Saudi Arabia would be willing to increase oil production next year if crude oil prices remained high. Increasing oil production and the Kingdom's recognition of Israel are part of efforts to win goodwill in the US Congress in exchange for a defense deal with the US.

Saudi Arabia announced in July that it would continue its 1 million barrels per day cut in oil production until the end of the year. Following the decision, Brent crude oil had approached the $ 100 per barrel threshold before last week's retreat. US West Texas oil, on the other hand, exceeded the $95 mark for the first time in 13 months last week, albeit briefly.

In a statement on the clashes in the Gaza Strip, Saudi Arabia's Foreign Ministry called on both sides to stop the escalating violence and exercise restraint. Saudi officials reiterated that they have repeatedly warned of "the dangers of the situation exploding as a result of the continued occupation, the deprivation of the Palestinian people of their legitimate rights and the repetition of systematic provocations against their holiness."

RBC's Croft reports that the Israeli government has promised an unprecedented response.