Mohammed Fayq Abu Mostafa/REUTERS
- Oil prices jumped Monday, with traders worried that Hamas' attack on Israel could disrupt supply.
- Hedge fund manager Pierre Andurand expects the conflict to benefit Saudi Arabia, which recently started pumping out less crude.
- "The market will eventually have to beg for more Saudi supply," he said in a post on X.
Hamas' surprise assault on Israel will drive up oil prices and force global energy markets to "beg" Saudi Arabia to reverse its recent production cuts, according to Pierre Andurand.
The legendary commodities trader said Saturday that the militant group's raid will disrupt longer-term supplies, with Riyadh unlikely to start pumping out more crude until Brent hits $110 a barrel.
"As the Levant is not a large oil producing region, it is unlikely to impact oil supply in the short term," he wrote in a post on X. "And therefore one should not expect a large oil price spike in the coming days. But it could eventually have an impact on supply and prices."
"Global oil inventories are low, and the Saudi and Russian production cuts will lead to more inventories draws over the next few months," the Andurand Capital founder added. "The market will eventually have to beg for more Saudi supply, which I believe, will not happen sub $110 Brent."
Oil prices jumped Monday as traders fretted that major producer Iran could become embroiled in a wider conflict, with Brent climbing 3% to just over $87 a barrel. The Wall Street Journal reported Saturday that Iranian security officials had helped Hamas to plan its attacks.
"As Iran is also behind Hamas' attacks on Israel, there is a good probability that the US administration will start enforcing those sanctions on Iranian oil exports more tightly," Andurand wrote. "That would further tighten the oil market."
Crude benchmarks slipped last week on fears of a global slowdown in demand, but are still up around 16% since the end of June, driven higher by the leaders of the OPEC+ cartel electing to pump out less crude.
Saudi Arabia slashed its output by 1 million barrels a day back in July, while Russia started curbing its exports by around 300,000 barrels a day the following month. Both countries said last week that they planned to keep up the cuts until the end of 2023.