Explained | What impact will the Israel-Hamas war have on oil?

A war between Islamist group Hamas and Israel poses one of the most significant geopolitical risks to oil markets since Russia’s invasion of Ukraine last year.

While oil flows have not yet been affected, analysts and market observers point to two major implications if the conflict escalates.

First, the U.S. could tighten or step up enforcement of sanctions on Iran should it be implicated in Hamas’ attack on Israel, which could further strain an already undersupplied oil market.

Second, a deal being brokered by Washington to normalise relations between Saudi Arabia and Israel, which could see the kingdom increase oil output, could be derailed.