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Oil jumped to the highest price since October as Israel braced for a possible attack from Iran, a development that would threaten major disruptions in a region that accounts for a third of the world\u2019s crude output.<\/p>\n
An assault is expected to come\u00a0as soon as the next 48 hours<\/a>, which would mark a significant widening of the conflict that started when Hamas attacked Israel in\u00a0October<\/a>. Global benchmark Brent surged as much as 2.7% to top $92 a barrel, a level last reached during the early days of the war. US benchmark West Texas Intermediate climbed as much as 3.1% to surpass $87.<\/p>\n Israel<\/a>\u00a0is expecting a drone or missile attack on government targets within days, either directly or from Iran\u2019s proxies, people familiar with Western intelligence assessments said. The move still hasn\u2019t been approved by Tehran\u2019s highest-ranking officials, the people said, while the US has moved additional military assets into the region.<\/p>\n \u201cDirect Iranian engagement puts higher odds of a potential supply disruption in the region, causing many traders to continue to reach for exposure in crude and upside crude call options,\u201d said Rebecca Babin, a senior energy trader at CIBC Private Wealth. \u201cHeading into a weekend with significant headline risk, there are few sellers willing to step in and sell the rally.\u201d<\/p>\n Oil has surged about 19% this year as the Middle East conflict bolsters a market shaped by supply restrictions and\u00a0stronger-than-expected demand<\/a>.\u00a0<\/p>\n The escalating geopolitical tensions \u2014 also including attacks on Russian energy infrastructure by Ukraine \u2014 have spurred bullish activity in the oil options market. There has been elevated buying of call options \u2014 which profit when prices rise \u2014 in recent days, with implied volatility jumping to a two-month high. The options on Brent are still trading at a premium over bearish puts.<\/p>\n<\/div>\nSubscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up<\/a> for free.<\/div>\n<\/div>\n