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Oil Prices Rise 1% as Mideast Attacks Heighten Supply Concerns

This picture taken from the area of Dbayeh north of Beirut shows an oil tanker docked off the coast of Beirut on October 24, 2024 amid the ongoing war between Israel and Hezbollah. (Photo by Joseph EID / AFP)
This picture taken from the area of Dbayeh north of Beirut shows an oil tanker docked off the coast of Beirut on October 24, 2024 amid the ongoing war between Israel and Hezbollah. (Photo by Joseph EID / AFP)
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Oil Prices Rise 1% as Mideast Attacks Heighten Supply Concerns

This picture taken from the area of Dbayeh north of Beirut shows an oil tanker docked off the coast of Beirut on October 24, 2024 amid the ongoing war between Israel and Hezbollah. (Photo by Joseph EID / AFP)
This picture taken from the area of Dbayeh north of Beirut shows an oil tanker docked off the coast of Beirut on October 24, 2024 amid the ongoing war between Israel and Hezbollah. (Photo by Joseph EID / AFP)

Oil prices rose more than 1% on Thursday, reversing some of the previous session's losses, as the Middle East conflict and reports of North Korean troops ready to help Russia in Ukraine kept traders on edge ahead of the US presidential election.

Brent crude futures were up $1.26, or 1.7%, to $76.22 a barrel as of 0905 GMT. US West Texas Intermediate crude futures climbed $1.26, or 1.8%, to $72.03, Reuters reported.

Oil prices have gained about 4% this week after shedding more than 7% last week on concerns of oversupply and weak demand and a perceived calming of Middle East tensions.

"The opposing forces of economic anxiety, loose oil balance and potential war-related supply disruptions will ensure that no clear oil price direction emerges in the immediate future whilst the risk remains skewed to the downside in the medium term," said Tamas Varga of oil broker PVM.

On Wednesday, the US said for the first time it had seen evidence North Korea has sent 3,000 troops to Russia for possible deployment in Ukraine, a move that could mark a significant escalation in Russia's war against its neighbor.

In the Middle East, an exchange of heavy fire between Israel and Hezbollah heightened supply concerns, as Israeli strikes also hit the Syrian capital Damascus early on Thursday, Syrian state media reported.

That escalation comes as Washington makes a push for peace between Israel and Iran-backed groups Hezbollah and Hamas before the Nov. 5 US presidential election that could alter both its Middle East and oil policy.

"Trump is leading over (Kamala) Harris based on current data from betting markets and Trump has proposed making the US a major oil supplier," said OANDA senior market analyst Kelvin Wong, adding that could depress prices.

While betting markets put Trump ahead, other polls show the result is currently too close to call.

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IMF Says International Community Should Provide Grants to Lebanon

Smoke billows over Beirut's southern suburbs, after an Israeli strike, amid the ongoing hostilities between Hezbollah and Israeli forces, as seen from Baabda, Lebanon October 25, 2024. REUTERS/Mohamed Azakir
Smoke billows over Beirut's southern suburbs, after an Israeli strike, amid the ongoing hostilities between Hezbollah and Israeli forces, as seen from Baabda, Lebanon October 25, 2024. REUTERS/Mohamed Azakir
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IMF Says International Community Should Provide Grants to Lebanon

Smoke billows over Beirut's southern suburbs, after an Israeli strike, amid the ongoing hostilities between Hezbollah and Israeli forces, as seen from Baabda, Lebanon October 25, 2024. REUTERS/Mohamed Azakir
Smoke billows over Beirut's southern suburbs, after an Israeli strike, amid the ongoing hostilities between Hezbollah and Israeli forces, as seen from Baabda, Lebanon October 25, 2024. REUTERS/Mohamed Azakir

The international community should work to end the conflict in the Middle East and provide grants to Lebanon, the head of the IMF's Middle East and Central Asia department has said.

Jihad Azour spoke to AFP in Washington, where the annual meetings of the International Monetary Fund and the World Bank are currently taking place.

In updated economic estimates, the Fund slightly downgraded its outlook for economic growth in the Middle East and North Africa to 2.1 percent this year, while maintaining its 4.0 percent growth outlook for 2025.

However, these estimates do not take into account the economic impact of the recent escalation of conflict in southern Lebanon, where Israel has invaded to fight Hezbollah.

Azour, a former Lebanese finance minister, noted that the most severely affected places, including Lebanon and the Palestinian territories, were facing a "huge humanitarian problem" which has devastated their economies.

"You have massive loss in output, you have a massive destruction in infrastructure, and you have a huge set of needs for additional spending, for shelter, for health and so on," he said.

"We expect that growth will be negative in those cases, and we expect that the recovery would take longer to materialize," he added.

The IMF has suspended its forecasts for the Lebanese economy, citing an "unusually high degree of uncertainty." But a recent United Nations Development report estimated that the country's GDP would be 9.2 percent smaller as a "direct consequence" of the conflict.

"You have massive destruction of infrastructure in a large region, which is the south, and mass destruction of livelihood, because this is an agricultural region that was severely affected," Azour said, adding that almost 20 percent of Lebanon's population had been displaced.

"We encourage the international community, we encourage the friends of Lebanon, to provide grants," he continued, calling on the international community "to put its utmost effort in order to solve the problem, in order to reduce the suffering of people."

For countries indirectly affected by the conflict, like Jordan and Egypt, the impact of Israel's ongoing military campaigns in Gaza and Lebanon has been felt differently.

While Egypt has been hit hard by a 70 percent fall in revenues from ships traversing the Suez Canal, Jordan's economy has suffered from a steep decline in tourism, Azour said.