Oil Surges After Iran Calls For Oil Embargo Against Israel

Oil prices spiked on Wednesday morning after Iran called for an oil embargo against Israel over its air strikes on Gaza.  Iranian Foreign Minister Hossein Amirabdollahian said there should be an “an immediate and complete embargo on the Zionist regime by Islamic countries, an oil embargo against the regime,” Bloomberg reported citing a ministry statement on Telegram. He also urged Muslim countries to expel Israeli ambassadors.

Amirabdollahian made the comments in Saudi Arabia at a summit of the Organisation of Islamic Cooperation, called to discuss the Israel-Hamas war. The comments came as US President Joe Biden arrived in Tel Aviv in a bid to calm regional tensions and support Israel.

Oil traders are increasingly concerned that Israel’s war on Hamas will spread and potentially draw in Iran and its allies such as Hezbollah in Lebanon.

Still, Israel is a small importer. And while other Middle Eastern energy producers, including Saudi Arabia and the United Arab Emirates, have criticized Israel for its strikes on Gaza, they’ve not talked of halting sales to it or any of its allies.

Brent crude extended gains, rising as much as 3.5% following the comments. It traded 2.6% higher at $92.30 a barrel as of 7:15 a.m. ET.