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[Why Oil Matters] The Israeli-Palestinian Conflict Escalates. Opportunity to Buy?
Israel has formally declared war against Hamas after the Palestinian militant group launched a surprising infiltration into the country on October 7.
Oil traders were focused on Iran as the Wall Street Journal reported that Iranian security officials helped Hamas plan the attack. Global benchmark Brent and West Texas Intermediate futures traded over 4% on Monday.
![[Why Oil Matters] The Israeli-Palestinian Conflict Escalates. Opportunity to Buy?](https://ussnsimg.moomoo.com/77777025/editor_image/e9f94218170934c8b1f7081519cb044d.png/big)
There is concern about whether the conflict will have a lasting and meaningful impact on global oil markets.
Why do oil prices tend to experience sustained gains after Middle East crises? Here is what you should know.
Crude oil, referred to as the "mother of all commodities" and the "lifeblood of all industrialized countries," is a crucial resource for economic development worldwide.
Oil is a vital commodity for economic growth.
Crude oil is a crucial fuel source for global industries and vehicles, and as "a nation on wheels", the US is both the largest producer and consumer of crude oil. In the 21st century, emerging economies such as China have experienced rapid growth, leading to an increased demand for crude oil due to their infrastructure development and industrial expansion needs.
As a non-renewable resource, countries with abundant reserves have pricing power over crude oil.
![[Why Oil Matters] The Israeli-Palestinian Conflict Escalates. Opportunity to Buy?](https://ussnsimg.moomoo.com/77777025/editor_image/b20de08b27873a4693b81ae72c46af14.png/big)
How does the supply and demand relationship affect oil prices?
Crude oil, like most commodities, is affected by supply and demand. When there is more supply than demand at a given level, the market price decreases. Conversely, when there is limited supply and high demand, crude oil prices can surge.
Until now, the global oil market has been a seller's market. As a well-known cartel, OPEC+ member countries have a strong incentive to keep oil prices as high as possible. Despite having the world's highest oil reserves, OPEC+ often controls global crude oil supplies through production cuts or supply restrictions for their interests.
Similarly, crude oil inventories can provide insight into the supply-demand relationship in the market. When petroleum inventories increase, it can be seen as a signal that the market supply is sufficient or demand has decreased, putting pressure on oil prices to fall. Conversely, a decrease in inventory may indicate increased demand, and prices may rise sharply.
![[Why Oil Matters] The Israeli-Palestinian Conflict Escalates. Opportunity to Buy?](https://ussnsimg.moomoo.com/77777025/editor_image/b47697bc4399349dbcd5327329b2fde5.png/big)
Geopolitics and unexpected events can impact oil supply
Crude oil is the most closely linked to geopolitics and international relations commodity compared to other commodities. In the case of geopolitical conflicts between major oil-producing countries and consumers, it can lead to a decrease in supply, causing oil prices to soar. Similarly, any indication of improved relations, particularly in oil-producing regions, may cause oil prices to decrease as geopolitical tensions can drive them up by making it difficult for oil production and exports.
Two large-scale global oil crises occurred due to oil embargoes leading to supply disruptions. During these periods, world oil market prices skyrocketed, significantly impacting countries that rely on oil and causing their economies to slow down noticeably.
![[Why Oil Matters] The Israeli-Palestinian Conflict Escalates. Opportunity to Buy?](https://ussnsimg.moomoo.com/77777025/editor_image/aa876d2d95af3329a285ca13ec6af679.png/big)
Understanding the supply and demand relationship, one can easily understand why geopolitical tensions will affect the price of oil. Of course, there are many other factors that affect oil prices, such as
If you need a more in-depth interpretation, please come to moomoo Learn and read the full article >> The Underlying Conflicts Surrounding Crude Oil Prices
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Trump 2.0 Era: How will global markets evolve?
🎙️Discussion: 1. How will tariff policies affect the movement of key assets such as U.S. stocks, gold, and Bitcoin? 2. Given this context,
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Mr Trecherous :
What A Coincidence 
Marijuana Jesus : the analogs that you are using does not take into account that modern oil fracking ended the theory of peak oil and thus all the supply/ demand economics after its invention is flawed and arguments jiberish.
Revelation 6 Marijuana Jesus : I bet you’re just a hoot at parties!
anxiousdawg Mr Trecherous : what this has to do with it , they have to abide by the US constitution
Mr Trecherous anxiousdawg :
SpyderCall : Really great article. I posted something along these lines a few months ago. This article does a much better job of explaining. Great graphics also
Chris “ money “ : Great article and good graphics’s
Moomoo Learn OP Marijuana Jesus : We appreciate the feedback! Input from users like you helps moomoo Learn become the best place it can be.
Moomoo Learn OP SpyderCall : It's a great honor to be helpful to you.
HuatEver : Very informative. The graphics well illustrated the points mentioned.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Thanks
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