Oil rose sharply on Friday, after the United States approved airstrikes against Islamic militant in Iraq, fueling risks of a possible disruptions from the OPEC member.
The sentiment for oil was boosted before the weekend, with West Texas Intermediate and Brent crude adding more than $1 in the early trade.
President Barack Obama authorized targeted airstrikes and emergency assistance missions in northern Iraq, saying Thursday that US must act to protect American Personnel and prevent a humanitarian catastrophe in the face of advances by violent Islamist militants.
The air strikes would be the first carried out by the US military in Iraq since the withdrawal of its forces at the end of 2011, but Mr. Obama insisted he would not commit any ground forces and had no intention of letting the US get dragged back into a war there.
As of 04:38 a.m. ET:
- West Texas Intermediate for September delivery rose 0.62% to $97.94 a barrel on the New York Mercantile Exchange
- Brent for September delivery rose 0.74% to $106.22 a barrel on the ICE Exchange in London
earlier this week, the US and NATO said that Russia had massed thousands of troops at the Ukranian borders and could -- news that offered a boost for the oil sentiment as traders started to specualtion an escalation between Ukraine and Russia would result in a possible halt in European supplies.
However, the probability of supply disruptions from Russia, the world’s largest energy exporter, remains low. The latest round of sanctions from the West has spared the country’s oil exports. It seems an unlikely proposition at this point that Europe would cut off its primary supplier of energy.
Russian President Vladimir Putin on Wednesday signed a decree imposing a one-year ban on certain agricultural produce, foods, and raw materials from countries that have sanctioned Russia, including the US and the European Union.
Oil traders are still waiting for a new direction with the ongoing geopolitical tension in some OPEC members amid signs of weak demand and high levels of supply from global oil markets.
Meanwhile, the lingering uncertainty about the East-West tension over the conflict in Ukraine seem to hold little potential to meaningfully impact prices.