Oil dips on investor caution as market eyes Middle East turmoil

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Oil dips on investor caution as market eyes Middle East turmoil

© Reuters. FILE PHOTO: An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS/File Photo

Both benchmarks surged more than $3.50 on Monday as the clashes raised fears that the conflict could spread beyond Gaza into the oil-rich region. Hamas launched the largest military assault on Israel in decades on Saturday, while fighting continued into the night on Monday as Israel retaliated with a wave of air strikes on Gaza.

"If reports of Iran's involvement turn out to be true, this would provide another boost to prices, as we would expect to see the U.S. enforcing oil sanctions against Iran more strictly. That would further tighten an already tight market," the ING analysts added., markets worried that if the conflict escalates it could hurt Middle East supply and worsen an expected deficit for the rest of the year.

Iran is complicit even though the United States has no intelligence or evidence that points to Iran's direct participation in the attacks, a White House spokesperson said on Monday.

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