Oil prices jump as Israel-Hamas war raises concerns over Middle East tensions

Oil prices have risen over fears the Israel-Hamas fighting could involve more nations in the Middle East.

The cost of a barrel of Brent crude, the benchmark for oil prices, was at $89 (£73.10) earlier this morning, before falling back to $86 (£70.64).

While the price is down compared to the past month, it was a more than 3% rise following the Hamas attacks on Israel and the strikes on the Gaza Strip.

Less than a month ago the price of Brent crude was $94 a barrel (£77). More expensive oil prices mean the price of petrol and diesel will go up and production, which is reliant on oil, also increases in price.

Such rises in energy costs will fuel inflation.

There are market worries that Iran, which is an oil exporter, could be drawn into the conflict.

Israel claims Iran may have funded or supported the group.

Rockets were also fired into Israel from Lebanon, adding to concerns of a multi-state conflict.

“Investors assess the potential for the conflict to disrupt supply in the Middle East, if other countries are drawn in.

“There are concerns that deep and incessant retaliative strikes on Gaza could potentially bring Iran into the conflict and have an impact on the flow of energy in the region,” said Susannah Streeter the head of money and markets at Hargreaves Lansdown.

Prices have also been pushed up due to supply cuts by Saudi Arabia and Russia.