Oil prices ease as aid convoys arrive in embattled Gaza Strip

Army soldier miniatures and stock graph are seen in this illustration taken Oct 9, 2023. REUTERS/Dado Ruvic/Illustration/File photo

TOKYO  – Oil prices eased on Monday as aid convoys started to arrive in the Gaza Strip over the weekend amid diplomatic efforts to contain a conflict between Israel and the Palestinian Islamist group Hamas from spreading to the wider oil-rich region.

Brent crude futures fell 60 cents to $91.56 a barrel and U.S. West Texas Intermediate crude futures lost 61 cents to trade at $87.47 a barrel at 0038 GMT.

For the past week, contracts rose more than 1 percent for a second consecutive weekly jump, on fear of potential supply disruption if the Israel-Hamas war grows into a wider confrontation in the Middle East, the world’s biggest oil-supplying region.

“Israel agreed to hold off its attack on Hamas following pressure from the U.S.,” ANZ Research said in a client note. “This eased concerns that the Israel-Hamas war would spread across the Middle East and disrupt supplies.”

To ease supply pressure – already tight due to output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and affiliates including Russia – the U.S. suspended sanctions on OPEC member Venezuela after a Venezuelan government deal with the opposition.

Aid convoys started to arrive to the Gaza Strip from Egypt over the weekend, as Arab leaders and foreign ministers gathered for a summit in Cairo which was unable to yield a joint statement.

U.S. President Joe Biden, who visited Israel last week, on Sunday had calls with the leaders of Canada, France, Britain, Germany and Italy, after speaking with Israeli Prime Minister Benjamin Netanyahu and Pope Francis.

Leaders of France and the Netherlands will visit Israel this week in search of a solution for the conflict which ignited on Oct. 7 after a Hamas attack. In latest developments, Israel has bombarded Gaza with air strikes and its aircraft have struck Lebanon.