The geopolitical risk premium returned to oil markets this week after Israel rejected a ceasefire offer and bombed Rafah, OilPrice reported.

Oil prices are rising as a result of continued tensions in the Middle East and robust U.S. demand. Shipping giants such as Maersk have voiced concerns that the Red Sea shipping crisis may continue throughout 2024 – a worrying prospect for not just shippers, but for Western leaders in general. Geopolitical upheaval is one of the reasons why JP Morgan sees a $10 upside for oil prices. The investment bank sees tightening supply and robust demand this spring. A $10 jump in crude prices could be good news for North American oil companies.

The geopolitical risk premium kicked back in big time this week after Israel rejected a ceasefire offer in Gaza and bombed the border city of Rafah, making it increasingly unlikely that the upcoming weeks would see any de-escalation of tensions in Gaza. Relatively bearish calls from the US Energy Information Administration, saying that US crude output is unlikely to surpass the current level of 13.3 million b/d until early 2025, have also buoyed oil prices, with Brent poised to end the week slightly below $82 per barrel. Devon Energy to kick off 2024 M&A season. US oil producer Devon Energy has reportedly approached Enerplus, a Calgary-headquartered upstream firm mostly focused on Bakken and Marcellus, with an acquisition offer that could go up to $3 billion.

India courts Guyana for oil deals. The Indian government is seeking a multi-year oil purchase deal with Guyana and would be keen to buy into exploration blocks there, suggesting India’s state-owned companies might pick up some of the relinquished parts of the Stabroek block. ExxonMobil plays with Venezuelan fire.US oil majorExxonMobilannouncedit would drill two exploratory wells north and west of its Stabroek block in the Essequibo offshore area disputed by Venezuela, triggering the ire of Caracas and raising tensions in the region again.