Oil prices rose on Monday as traders weighed an increased risk premium on political uncertainty in the Middle East, while demand outlook concerns limited the gains.
The international oil benchmark of Brent crude increased by 0.97% to $71.57 per barrel at 10.48 a.m. local time (0748 GMT), up from the previous session’s close of $70.88.
The US benchmark West Texas Intermediate also rose by 1.03% to $67.65 per barrel, compared to $66.96 at the close of the prior session.
On Sunday, 61 years of Baath Party rule in Syria collapsed after the capital Damascus fell out of the hands of regime control. Deposed President Bashar al-Assad, fled to Russia, where he was offered asylum.
However, the Israeli army early Sunday deployed additional forces along the buffer zone separating Syria and the occupied Golan Heights, citing concerns about the potential infiltration of armed groups into the region.
The developments in Syria have introduced uncertainty in the Middle East, lending some support to the oil market.
Moreover, Israel’s genocidal war continues unabated against Palestinians in the Gaza Strip, despite calls by the international community to halt attacks. The Israeli army also continued to strike Lebanon, undeterred by a cease-fire agreement that came into effect on Nov. 27.
However, Saudi Arabia’s price cuts and the decision by the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to extend production cuts limited further price increases, highlighting demand concerns, especially from China.
Saudi Arabian oil company Aramco on Sunday cut its official prices for Asian customers to the lowest level since early 2021.
On Dec. 5, with the prospects of a slowdown in global demand and rising supply in non-OPEC+ producers, OPEC+ group pushed back the start of oil output increases by three months until April and extended the full unwinding of production cuts by a year until September 2026.
