This week, both the benchmarks, including WTI and Brent Crude Oil, jumped by more than 3%, a significant rise compared with the previous week across the globe after the strike at Gaza Hospital. At the same time, the withdrawal in the US Crude inventories further escalated the current situation. Brent crude futures rose $4.49, or 5.2%, to settle at $91.19 a barrel, while US West Texas Intermediate (WTI) crude futures rose $2.74, or 3.2%, to close at $87.25 a barrel during the third week of October.

The escalating tensions in the Middle East, the biggest oil-producing region, left no room to ease the Crude Oil prices, which are touching heights after the Gaza hospital blast that left hundreds of Palestinians dead and caused concerns about global oil supply disruption. This was the counterattack stated by the Israeli group against Hamas, which killed hundreds of Israeli people at the beginning of October 2023. A summit, where US President Joe Biden was scheduled to meet with Palestinian and Egyptian leaders, was abruptly called off by its host, Jordan, following an explosion at a hospital in Gaza. Following that, the threat of Crude Oil supply disruption rose after Iran called for restricting Crude Oil supplies in Israel. Along with that, the US deal to put export sanctions on Iran for supporting Hamas in the War.

Now, talking about the US market, energy firms pulled 4.5 million barrels of Crude from stockpiles during this timeframe, as stated by the US Energy Information Administration (EIA). Moreover, Oil supplies at the Cushing storage facility in Oklahoma fell by 0.8 million barrels to the lowest level since October 2014. As stated by EIA, several enterprises were worrying about the quality of the Crude Oil left in the storage hub, which is continuously declining.

There is growing speculation that the US and Venezuela might be on the verge of an agreement to temporarily lift a four-year-old sanction policy on OPEC member Venezuela that would allow Venezuela to resume exporting oil to the United States, which could increase the global Crude Oil supplies. However, the attempt remained unaffected on the Crude Oil prices as the resurgence in the prices of Crude Oil is primarily attributed to the escalation of geopolitical tensions between Israel and the Plastelines group.

As per ChemAnalyst, if the conflict escalates, it could damage the pipeline or disrupt its operation, leading to a deterioration in the Crude Oil exports from the region. Observers also seemed more optimistic that the Israel-Hamas conflict would spread to other countries in the Middle East, possibly affecting oil production in the upcoming weeks.