Oil jumped as much as 3% on Friday afternoon after the Israeli army said it would expand its ground operations in Gaza.
West Texas Intermediate settled 2.8% higher at $85.54 per barrel. Brent (BZ=F) crude rose 2.3% to $90.48 per barrel.
Crude had started the session higher on Friday as concerns of a broader conflict in the Israel-Hamas war grew after the US struck Iran-backed facilities in Syria.
“Iran’s involvement is the key focus for the crude market and this is essentially because they are a huge crude producer,” Rebecca Babin, CIBC Private Wealth energy trader, told Yahoo Finance Live recently.
Iran produces roughly 3.2 million barrels per day. An impact on the country’s output would further squeeze supply already hit with OPEC+ reductions and Saudi Arabia’s unilateral output cuts through the end of the year.
Despite’s Friday’s rise, oil was still down roughly 3% for the week on demand concerns and indications that the fighting in the Middle East could stay contained. On Thursday prices fell more than 2% amid ongoing diplomatic efforts to delay Israel’s ground invasion of Gaza.
Prices spiked immediately following Hamas’ surprise attack on Israel earlier this month. The anticipation of a widening conflict sent Brent and WTI up more than 4% in one day.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.
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