Oil began the week with a slight gain as the market responded to yet another round of geopolitical developments. During Asian trading early this week, Brent crude rose by 34 cents (or 0.54%) to $67.07 per barrel. US WTI (October futures) added the same 34 cents, reaching $63.02. The more active November contract increased by 36 cents (or 0.58%) to $62.76.
The reason for this movement is familiar to energy markets: when geopolitical tensions flare, oil prices tend to rise. This time, the price action was fueled by news from Europe and the Middle East.
In Europe, aerial tensions escalated as, according to media reports, Russian aircraft violated Polish and Estonian airspace. Although there is no immediate threat to oil supplies, markets tend to grow uneasy well before any direct consequences arise, especially when the global climate is defined more by political tensions than by actual weather conditions.
At the same time, the Middle East remained in focus. Four Western countries recognized the Palestinian state, prompting a sharp reaction from Israel and increasing regional instability—an area crucial for oil production and exports. Unsurprisingly, the market could not overlook another geographic flashpoint.
However, the oil market also faces pressures from the supply side. Iraq is ramping up exports: in August, average daily exports reached 3.38 million barrels, with expectations of 3.4–3.45 million in September. The country is gradually exiting its voluntary output cuts under the OPEC+ agreement, signaling a progressive increase in supply in the market.
The balance between “worrying news” and “rising supply” is once again causing oil prices to move in a cautious and indecisive manner. For now, there is some upward momentum, but no dramatic price swings.
As always, investors are paying close attention, especially now, when global circumstances make it clear that oil reacts not only to numbers but also to the global sentiment, which could hardly be called calm.
