On the 7th, the sudden escalation of the Israeli-Palestinian conflict shocked the world. The former spokesperson of the Israeli army said in an interview that the Hamas attack was a &#34;Pearl Harbor-like moment&#34; for Israel.
On that day, US President Biden called Israeli Prime Minister Netanyahu, stating that the US support for Israel's security is &#34;rock solid&#34;; US Defense Secretary Lloyd Austin stated that efforts will be made to ensure that Israel &#34;has everything it needs for self-defense&#34;.
The Saudi Foreign Ministry reiterated that the country has repeatedly warned of the &#34;risk of continued occupation and deprivation of the legitimate rights of the Palestinian people leading to a situation getting out of control&#34;. Iran's state news agency reported that an advisor to Iran's Supreme Leader Ayatollah Khamenei expressed support for Hamas' attack on Israel.
It is worth noting that Netanyahu is facing immense pressure domestically. Previously, the Netanyahu government vigorously pursued judicial reforms to limit the power of judicial institutions, and this conflict may subject him to greater political pressure. If he is accused of causing internal divisions and neglecting defense, Netanyahu's political plans may be significantly affected.
<h2>&#34;Blood-red Assist&#34; from Oil Prices</h2>
The smoke-filled battle has cast a shadow over a three-party agreement that the United States is mediating.
Wallstreetcn mentioned on the 6th that the Biden administration is attempting a three-party agreement, aiming to normalize relations between Saudi Arabia and Israel, while providing security guarantees to Riyadh and Saudi Arabia agreeing to increase oil production. Reversing the upward trend in oil prices over the past two years will help curb inflation in the United States and contribute to President Biden's re-election campaign.
This agreement has raised doubts in the market about future joint production cuts by Saudi Arabia and Russia, and is considered the &#34;real culprit&#34; behind the sharp drop in oil prices this week.
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Analysts believe that this military conflict is taking place during negotiations for the normalization of relations between Israel and Saudi Arabia, and this conflict will undoubtedly affect the progress of the normalization process between the two sides. For oil prices, this may be a &#34;blood-red assist&#34;.
Hamas has previously expressed condemnation of any progress in the normalization of relations between Arab countries and Israel. &#34;Any form of normalization of relations between Arab countries and Israel is unacceptable and will harm the Palestinian cause.&#34; Many observers believe that one of the important motivations for this conflict is to sabotage the normalization agreement between Saudi Arabia and Israel.
Media analysis suggests that the conflict may lead to a short-term increase in oil prices. The main reasons are the impact on Iran's oil production and the suspension of negotiations, which reduces the possibility of increased production by Saudi Arabia.
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If Israel concludes that Hamas is acting on the instructions of Iran and takes retaliatory action, the situation may become more urgent and oil prices may soar.
Even if Israel does not take immediate action against Iran, Iran's oil production may still be affected. Since the end of 2022, Washington has been turning a blind eye to the surge in Iran's oil exports. At that time, Washington's priority was to ease relations with Iran and initiate informal negotiations.
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Therefore, Iran's oil production has increased by nearly 700,000 barrels per day this year, making it the second largest incremental supply source in 2023, second only to US shale oil. Now, the White House may reimpose sanctions, which could push oil prices to $100 per barrel or even higher.
The Saudi-Israeli diplomatic agreement planned to be signed in 2024 may become a sacrifice... This reduces the possibility of Saudi Arabia increasing oil supply to help Washington. In addition, the conflict may also lead to reconciliation between Saudi Arabia and Iran, which is another unfavorable factor for the oil market.
Helima Croft, the head of commodity strategy at the Royal Bank of Canada, also expressed concern about whether Israel will publicly accuse Iran of being responsible for the Hamas attacks and whether the conflict will continue to escalate. &#34;A war that spreads beyond Israel and Hamas will definitely put pressure on global stock markets.&#34;
Xinhua News Agency quoted Ding Long, a professor at the Middle East Research Institute of Shanghai International Studies University, as analyzing that negotiations for the normalization of Saudi-Israeli relations are currently underway and tend to reach an agreement. This large-scale conflict between Palestine and Israel is estimated to continue for some time, which will definitely have a negative impact on the normalization of relations between the two sides. Saudi Arabia may temporarily suspend the process of normalizing relations with Israel in the short term, but in the long run, the normalization of Saudi-Israeli relations is only a matter of time.
Louis Navellier, a fund manager who has long been concerned about Middle East events and oil prices, holds a similar view. He believes that after the war, Israel and Saudi Arabia may reach some kind of diplomatic agreement. However, Navellier added that he doubts that the newly reached Middle East diplomatic agreement will include concessions from Saudi Arabia on oil prices. Navellier said:
&#34;After being criticized by the Biden administration, both Netanyahu and Saudi Crown Prince Mohammed bin Salman are unwilling to help Biden get reelected. In addition, Saudi Arabia is spending heavily on economic development and they need a certain level of oil to sustain their economy.&#34;
It is also reported that unlike in 1973, Washington can now use strategic oil reserves to regulate international crude oil prices:
&#34;If the tense situation in the Middle East leads to a surge in oil prices, the White House will definitely use strategic oil reserves.
Although the reserve inventory has dropped to the lowest level in 40 years, it is still sufficient to deal with another crisis.&#34;

A war that spreads beyond Israel and Hamas is bound to put pressure on global stock markets.

Israel's "Pearl Harbor moment"! The "bloody assist" of oil prices?