Stocks of oil producers are rising as the conflict in the Middle East between Israel and its neighbours escalates.
Oil prices rose as much as 5% on Oct. 1 after Iran launched a barrage of missiles at Israel, an escalation that analysts say could lead to a broader war across the Middle East.
West Texas Intermediate (WTI) crude oil, the U.S. standard, is now trading at $72.15 U.S. a barrel after languishing below $70 U.S. for most of September.
Brent crude oil, the international benchmark, is trading at $75.89 U.S. per barrel. The spike in crude oil prices is sending the stocks of producers and refiners higher as well.
Oil major Chevron’s (CVX) stock has gained 4% in the last 24 hours, while Exxon Mobil (XOM) and Shell (SHEL) have each seen their share prices rise about 5%.
Energy analysts say there is now a real possibility that the widening conflict in the Middle East will disrupt global crude oil production and supplies, which could further raise prices.
Before this latest escalation in the Middle East, oil prices had languished near multi-year lows due largely to demand concerns in China, the world’s largest energy market.
Analysts say they are now watching to see if a broader war in the Middle East disrupts Iranian oil shipments through the Strait of Hormuz, a key trade route for oil tankers.
Until now, most oil stocks have traded in negative territory this year.
Even with the latest jump in its share price, Chevron’s stock is still down 10% over the last 12 months and trading at $149.70 U.S. per share.