<div><main data-testid="main-content" id="main-content"><article><header></header><div data-component="image-block"><figure><p><span><picture><source srcset="https://ichef.bbci.co.uk/news/240/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg.webp 240w, https://ichef.bbci.co.uk/news/320/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg.webp 320w, https://ichef.bbci.co.uk/news/480/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg.webp 480w, https://ichef.bbci.co.uk/news/624/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg.webp 624w, https://ichef.bbci.co.uk/news/800/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg.webp 800w, https://ichef.bbci.co.uk/news/976/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg.webp 976w" type="image/webp"></source><img alt="A worker stands in the technical zone at Saudi national oil company Aramco in Saudi Arabia." height="549" loading="eager" src="https://ichef.bbci.co.uk/news/976/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg" srcset="https://ichef.bbci.co.uk/news/240/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg 240w, https://ichef.bbci.co.uk/news/320/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg 320w, https://ichef.bbci.co.uk/news/480/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg 480w, https://ichef.bbci.co.uk/news/624/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg 624w, https://ichef.bbci.co.uk/news/800/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg 800w, https://ichef.bbci.co.uk/news/976/cpsprodpb/B460/production/_131367164_gettyimages-73375922.jpg 976w" width="976"></img></picture></span><span role="text"><span>Image source, </span>Getty Images</span></p></figure></div><div data-component="byline-block"><div><div><div><p>By Annabelle Liang</p><p>Business reporter</p></div></div></div></div><div data-component="text-block"><p><b>Oil prices have jumped on concerns that the situation in Israel and Gaza could disrupt output from the Middle East.</b></p></div><div data-component="text-block"><p>Brent crude, the international benchmark, climbed by $2.25 a barrel to $86.83, while US prices also rose.</p></div><div data-component="text-block"><p>Israel and Palestinian territories are not oil producers but the Middle Eastern region accounts for almost a third of global supply.</p></div><div data-component="text-block"><p>Hamas's assault on Israel was the biggest escalation between the two sides for decades.</p></div><div data-component="text-block"><p>Western nations condemned the attacks. A spokesperson for Hamas, the Palestinian militant group, told the BBC that the group had direct backing for the move from Iran - one of the world's largest oil producers. </p></div><div data-component="text-block"><p>Iran denied involvement in the assault at a UN Security Council meeting in New York on Sunday, Reuters reported. But Iranian President Ebrahim Raisi has expressed support for the attack.</p></div><div data-component="text-block"><p>On Monday, Israel ordered US oil giant Chevron to pause production at the Tamar natural gas field off the country's northern coast, which is within range of rocket fire from the Gaza Strip.</p></div><div data-component="text-block"><p>The country's energy ministry, which has closed the field during previous periods of unrest, said there was enough fuel from other sources to meet Israel's energy needs. </p></div><div data-component="text-block"><p>Israel's largest offshore gas field, Leviathan, continues to operate as normal, Chevron said.</p></div><div data-component="text-block"><p>Energy analyst Saul Kavonic told the BBC that global oil prices have risen "due to the prospect of a wider conflagration that could spread to nearby major oil-producing nations such as Iran and Saudi Arabia". </p></div><div data-component="text-block"><p>On Monday morning, the price of West Texas Intermediate crude, the US benchmark, was up $2.50 a barrel at $85.30.</p></div><div data-component="text-block"><p>"If the conflict envelops Iran, which has been accused of supporting the Hamas attacks, up to 3% of global oil supply is at risk," Mr Kavonic added.</p></div><div data-component="text-block"><p>Caroline Bain, chief commodities economist at Capital Economics, told the BBC's Today programme that Iran had been increasing oil production over the course of this year despite US sanctions.</p></div><div data-component="text-block"><p>"The US seems to have turned a blind eye to a steady increase in Iranian production, that... is going to be more difficult for the US to ignore going forward from here," she said.</p></div><div data-component="text-block"><p>Overall, Ms Bain said Capital Economics expected demand for oil to exceed supply in the final three months of the year and "that should support higher prices".</p></div><div data-component="text-block"><p>Mr Kavonic said that about a fifth of global supply would be "held hostage" if passage through the Strait of Hormuz, a vital oil trading route is disrupted.</p></div><div data-component="text-block"><p>The Strait of Hormuz is crucial for the main oil exporters in the Gulf region, whose economies are built around oil and gas production.</p></div><div data-component="text-block"><p>Uncertainty over how events could develop in the coming days may also drive investments into US Treasury bonds and the dollar, which investors traditionally buy at times of crisis, said James Cheo from HSBC bank.</p></div><div data-component="text-block"><p>On Monday, Israel's central bank said it would sell up to $30bn of foreign currency in a bid to calm markets and support the country's own currency, the shekel, which has fallen sharply. </p></div><div data-component="text-block"><p>"At this stage, there is a bit of nervousness. [Investors] want to see a little more clarity, particularly on economic data and on developments associated with geopolitical uncertainty," added Mr Cheo.</p></div><div data-component="text-block"><p>Following Russia's invasion of Ukraine in February 2022, oil prices soared, hitting more than $120 a barrel in June last year. </p></div><div data-component="text-block"><p>They fell back to a little above $70 a barrel in May this year, but have steadily risen since then as producers have tried to restrict output to support the market.</p></div><div data-component="text-block"><p>Other members of Opec+, a group of oil-producing countries, also agreed to continued cuts in production in an attempt to shore up flagging prices.</p></div><div data-component="text-block"><p>Opec+ accounts for around 40% of the world's crude oil and its decisions can have a major impact on oil prices.</p></div></article></main></div>