Oil prices jumped around 4 percent in European trade on Friday amid supply concerns and heightened geopolitical risks in Israel and Gaza.
Brent crude futures jumped 3.7 percent to $89.16 a barrel, while WTI crude futures were up 3.9 percent at $86.14.
Supply concerns resurfaced after the U.S. tightened sanctions against Russian crude exports.
The U.S. Treasury Department said that it has imposed its first set of sanctions on two companies that shipped Russian oil in violation of a multinational price cap of $60 a barrel.
Russia is the world’s second-largest oil producer and it is feared that the new sanctions could tighten global supply.
The oil market is also grappling with rising geopolitical tensions in the Middle East after Israel’s military today called for all civilians of Gaza City, more than 1 million people, to relocate south within 24 hours.
The Israeli military said it would operate “significantly” in Gaza City in the coming days and civilians would only be able to return when another announcement was made.
“Now is a time for war,” Defense Minister Yoav Gallant said ahead of an expected ground invasion.
Meanwhile, Iran said opening a “new front” against Israel would depend on Israel’s actions in Gaza.
“Officials of some countries contact us and ask about the possibility of a new front (against Israel) being opened in the region,” said Foreign Minister Hossein Amir-Abdollahian during a meeting with Iraqi Prime Minister Mohammed Shia al-Sudani.
“We tell them that our clear answer regarding future possibilities is that everything depends on the actions of the Zionist regime in Gaza,” he said, according to a statement from the Iranian foreign ministry.
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