Israel-Iran War: Brent Oil Nears $80 as Trump Weighs Joining Attacks

•Goldman: Oil could exceed $90 if Iranian supply is disrupted

Emmanuel Addeh in Abuja

The war between Israel and Iran continued to impact the global oil industry yesterday, with Brent, Nigeria’s crude benchmark, nearing the $80 per barrel mark, made worse by uncertainty about potential US involvement.

The conflict entered its seventh day as Brent crude futures hit $78.85 a barrel and US West Texas Intermediate (WTI) crude for July was at $75.80, after Israel struck Iranian nuclear sites and Iranian missiles hit an Israeli hospital.

It came as Goldman Sachs said that a geopolitical risk premium of about $10 a barrel is justified, given lower Iranian supply and risk of wider disruption that could push Brent crude above $90.

Goldman’s analysts pointed to the disruption of oil flows via the Bab el-Mandeb Strait by the Yemeni Houthis’ attacks on vessels as an example of the fragility of Middle Eastern oil export security.

Besides, Barclays warned that crude prices could surge above $100 per barrel if the Middle East conflict escalates, and Brent could reach $85 per barrel if half of Iran’s oil exports are disrupted.

Also yesterday, President Donald Trump said he will decide within two weeks whether to strike Iran, his spokeswoman said, as Israel hit more Iranian nuclear sites and warned its attacks may bring down the leadership in Tehran.

White House spokeswoman Karoline Leavitt said she had a message dictated by Trump that “based on the fact that there’s a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks.”

White House press secretary Karoline Leavitt quoted a statement from President Trump saying he will make a decision on potential strikes on Iran “within two weeks.”

Trump has publicly mused for days about having the US increase the stakes by joining Israel’s strikes on Iran. His latest stance signals a step back after a run of tough rhetoric, including demands for residents of Tehran to evacuate, and his early departure from this week’s Group of Seven summit in Canada to return to Washington.

Trump for years has had a penchant for setting two-week deadlines, sometimes following through and at other times missing them or never acting at all, making “within two weeks” a stock phrase for pending decisions in both his White House terms.

Leavitt said Trump’s statement was a response to media speculation about the “situation in Iran.” She declined to elaborate on his timeline, including on how he views the chances of success of any further talks with Iran.

Trump’s goal — halting Iranian enrichment of uranium and preventing the country from obtaining nuclear weapons — remains intact, though “if there’s a chance for diplomacy, the president is always going to grab it,” she said.

Senior US officials have been preparing for the possibility of a strike on Iran, people familiar with the matter told Bloomberg, with some pointing to potential plans for a weekend strike. Top leaders at a handful of federal agencies have begun getting ready for an attack, one person said.

American Airlines Group Inc. suspended daily flights from the US to the capital of Qatar, while United Airlines Holdings Inc. paused service to Dubai because of military actions and heightened tensions in the Middle East.

As for the chances of a further spike in price, Iran is the third-largest producer among members of the Organisation of the Petroleum Exporting Countries (OPEC) extracting about 3.3 million barrels per day of crude oil.

About 18 million to 21 million bpd of oil and oil products move through the Strait of Hormuz along Iran’s southern coast and there is widespread concern the fighting could disrupt trade flows.

Prime Minister Benjamin Netanyahu said that while the military’s objective remains the destruction of Iran’s nuclear and ballistic missile capabilities, “we may create the conditions” to help change the government.

In answer to whether that meant targeting Supreme Leader Ayatollah Ali Khamenei, Netanyahu said “no one is immune.” Defense Minister Israel Katz earlier mentioned Khamenei by name, saying he would “be held accountable” after Iran’s missiles struck an Israeli hospital with the two countries continuing to exchange fire.

Senior US officials are preparing for the possibility of a strike on Iran in coming days, people familiar with the matter said, with some pointing to potential plans for a weekend strike. Top leaders at a handful of federal agencies have begun getting ready for an attack, one person said.

Trump has for days publicly mused about joining Israel’s strikes on Iran, a move that would escalate the conflict in the oil-rich Middle East. With no indication of a pause in hostilities, other international governments stepped up efforts to rein in the conflict.