Oil Advances as Israel’s Strike in Qatar Revives Risk Premium

Oil jumped after an Israeli attack in Qatar escalated the conflict in the Middle East, the source of about a third of the world’s supplies, increasing the geopolitical risk premium for crude.

West Texas Intermediate climbed as much as 2.3% to top $63 a barrel after the Israel Defense Forces conducted a strike in Doha targeting the senior leadership of Hamas, which has been declared a terrorist group by the US and Europe. Several blasts were heard in the city, according to media reports, and Qatar said the attack violated international law.  Bloomberg's Mike McGlone reports.

Israel conducted an unprecedented strike against senior Hamas leaders in the Qatari capital of Doha, escalating an already tense standoff between the country and Arab nations over the war in Gaza.

The move against the Iran-backed group was “a wholly independent Israeli operation,” Prime Minister Benjamin Netanyahu’s office said in a statement on Tuesday, suggesting the US — a close ally of both Israel and Qatar — had no direct involvement. “Israel initiated it, Israel conducted it, and Israel takes full responsibility.”

A White House official, who requested anonymity to discuss the operation, said Israel notified President Donald Trump’s administration immediately before the attack took place.

Qatar condemned the strike, calling it a “flagrant violation” of international law, after several blasts were heard earlier in Doha. Qatar “will not tolerate this reckless Israeli behavior and its continued tampering with regional security,” Foreign Ministry Spokesman Majed Al Ansari said in a post on X.

Hamas leaders, headed by Khalil Al-Hayya, survived the Israeli attack, Doha-based Al Jazeera reported, citing a senior Hamas source. There’s been no official confirmation on whether they are alive.

Israel has been fighting Hamas in Gaza since the militant group’s deadly attack on the country in October 2023. Qatar is one of the key mediators between Israel and the Palestinian group, designated a terrorist organization by the US and European Union, and has been central to on-off ceasefire talks between the two sides.

Those negotiations — co-mediated by Egypt — haven’t notably advanced since Hamas said in mid-August it had agreed to a proposal to release half of the hostages it still holds from the Oct. 7 attack in exchange for a partial withdrawal of Israeli troops. Israel, which has demanded Hamas fully disarm, has since initiated plans to take over Gaza City, and this week ordered its 1 million residents to leave ahead of a major military offensive.

“Israel’s targeting of Hamas leadership in Qatar ends the prospects of a ceasefire deal in Gaza, will unnerve Doha and other Arab Gulf states, and further erode the perception of the US as a reliable security partner,” Dina Esfandiary and Ziad Daoud, of Bloomberg Economics, wrote in a note. “It’s a significant escalation of tensions.”

Stoking Anger

Israel has never previously attacked Qatar, and the strike is likely to further anger Arab nations already on edge about the Palestinian deathtoll in Gaza and the humanitarian impact of the war. Israel’s campaign has devastated Gaza, and a United Nations body declared a famine in parts of the territory due to blocks on food aid.

The Israeli attack on Qatar may prove awkward for Trump, who has so far supported Israel’s military actions against Hamas and other Tehran-backed militant groups, as well as the airstrikes on Iran itself three months ago.

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