Gil Cohen-Magen/AFP via Getty Images
- Oil prices climbed again Wednesday.
- Crude benchmarks jumped around 2%, with Brent passing the $90 a barrel mark.
- The flare-up came after an explosion at a Gaza hospital fueled investors’ fears that the crisis in the Middle East will escalate.
Oil prices flared up again Wednesday after a devastating explosion at a hospital in Gaza fueled investors' fears that the ongoing crisis in the Middle East will escalate.
Brent jumped 2% to just under $92 a barrel in early-morning trading, while West Texas Intermediate climbed by the same amount to nearly $89 a barrel.
The benchmarks rose after a tragic blast at a Gaza hospital packed with Palestinians wounded in the ongoing war between Israel and Hamas.
The Hamas-run health ministry said that around 500 people were killed in the bombing, which it attributed to Israel's military. Israel responded by blaming Hamas for the attack, saying that the hospital had been struck by a misfired rocket.
While neither Israel nor Palestine are major oil producers, crude prices have swung since Hamas launched a deadly terrorist attack against the Jewish state on October 7.
Investors are worried that big Middle Eastern exporters, including Iran and Saudi Arabia, could be drawn into a wider conflict if tensions escalate. That could lead to Israel's western allies imposing sanctions, slashing global crude supplies.
The commodity's next move will be driven by how Joe Biden responds to the hospital explosion, according to analysts. Biden landed in Israel Wednesday – but Jordan cancelled a planned summit with the US president after news of the explosion broke late Tuesday.
"Oil prices rallied 2% following the deadly explosion at the Gaza hospital as it boosts tensions across the Middle East just before the arrival of US President Joe Biden," deVere Group CEO Nigel Green said.
"Clearly, the US is a major influence in the Middle East due to its economic interests, military presence, national security concerns, strategic alliances, and diplomacy efforts," he added. "If the US President – who is, of course, one of the major power brokers - fails to cool rising tensions in the Middle East during his visit to the region, we expect oil prices to surge further."