Oil prices jumped Thursday, after President Joe Biden, when asked if he would support an Israeli strike on Iran’s oil facilities, said: “We’re discussing that. I think that would be a little … anyway.”

The market moves reflected continued nervousness about a potential Israeli military retaliation against Iran, which launched a barrage of missiles across Israel on Tuesday, doing little damage but increasing fears of an all-out war in the region.

Oil Rises More Than 4%

Oil prices rose more than 4% Thursday, with Brent crude, the global benchmark, climbing above $77 a barrel for the first time in a month after Biden’s remarks. Before the missile attack, Brent was trading at just above $71 a barrel.

Prime Minister Benjamin Netanyahu of Israel said after Tuesday’s attack that Iran had “made a big mistake — and it will pay for it.”

When asked if he would allow Israel to retaliate against Iran, which said it had launched the missiles in retaliation for the assassinations of leaders of its proxies Hamas and Hezbollah, Biden said: “First of all, we don’t ‘allow’ Israel. We advise Israel. And there is nothing going to happen today.”

Related Story: Gov. Newsom’s Efforts to Lower Gas Prices Are a Farce

Iran is a major oil producer, pumping about 2 million barrels a day, or about 2% of the world’s supply. Its production and sales are hampered by international sanctions, and most of its exports are bought by China.

The intensifying fighting between Israel and Iran and Iranian-backed groups, especially Hezbollah in Lebanon, has pushed up oil prices this week. The main concern is that the escalating conflict could prompt Iran to try to restrict the flow of oil from key exporters like Saudi Arabia and the United Arab Emirates.

Prices haven’t climbed back to their peaks this year, however, because those worries have been largely outweighed by factors including weak energy demand in China and increased oil production in the United States and elsewhere.

An agreement reached in June by Saudi Arabia and seven other oil producers to begin unwinding some production cuts also continues to weigh on prices. While these increases were recently postponed, the anticipation of increased supplies coming onto the market has offset some of the worry about potential outages stemming from fighting between Iran and Israel.

Until recently, oil prices had been steadily drifting lower, down from about $90 a barrel six months ago.

–

This article originally appeared in The New York Times.

By Jason Karaian and Stanley Reed/Tierney L. Cross
c. 2024 The New York Times Company