Oil prices rose almost 2% on Tuesday after Israel expanded its Middle East campaign with an attack on Hamas leadership in Doha, drawing sharp condemnation from Qatar and other regional powers.
Brent crude settled at $66.39 up 37 cents (0.6%), after touching a session high of $67.38. U.S. West Texas
Intermediate (WTI) closed at $62.63, also up 37 cents (0.6%).
The strike in Qatar marked a major escalation, threatening to derail fragile diplomatic efforts and prompting warnings of broader regional fallout. Analysts at Rystad Energy said the attack “appears to have closed” an already fragile negotiation track over the Palestinian conflict, while StoneX’s Alex Hodes noted it could harden positions among Arab states.
Oil benchmarks were already trading higher ahead of the headlines, supported by OPEC+’s smaller-than-expected output hike for October, expectations that China will continue stockpiling crude, and the possibility of new U.S. sanctions on Russian oil.
Markets now turn to U.S. weekly inventory data due Wednesday and fresh monthly reports from OPEC and the IEA later in the week. Traders are also weighing macroeconomic signals after the U.S. revised down employment data for the past year, reinforcing expectations that the Federal Reserve will cut interest rates at next week’s meeting. Lower rates reduce borrowing costs, bolster growth, and can lift oil demand.