Oil prices drop as relief convoys enter the troubled Gaza Strip

As supply convoys began to arrive in the Gaza Strip over the weekend and diplomatic efforts were made to prevent a conflict between Israel and the Palestinian Islamist party Hamas from expanding to the larger oil-rich region, oil prices decreased on Monday. U.S. West Texas Intermediate crude futures declined 61 cents to trade at $87.47 per barrel, while Brent crude futures dropped 60 cents to $91.56 per barrel.

Concern over a potential supply disruption if the Israel-Hamas conflict escalates into a larger conflict in the Middle East, the world’s largest oil-supplying region, caused contracts to rise more than 1% for the past week, marking the second consecutive weekly increase. After a Venezuelan government agreement with the opposition, the United States lifted sanctions on the OPEC member to relieve supply pressure, which was already high due to output curbs by OPEC and its associates, including Russia.

Over the weekend, while Arab presidents and foreign ministers assembled in Cairo for a conference that failed to produce a joint statement, aid convoys began to arrive in the Gaza Strip from Egypt. Following conversations with Pope Francis and Israeli Prime Minister , U.S. President , who visited Israel last week, called the presidents of Canada, France, Britain, Germany, Italy, and the United States on Sunday.

This week, the leaders of France and the Netherlands will travel to Israel in an effort to find a resolution to the crisis that began on October 7 following a Hamas strike. Israel recently blasted Gaza with air strikes and also hit Lebanon with its jets.

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