The Israel-Gaza war has had an immediate impact on oil prices, and experts said Tuesday that they believe the spike will be temporary, though the long-term effects on the commodity are so far uncertain.

The war had claimed the lives of at least 1,800 people as of Tuesday afternoon and is expected to escalate, after a deadly weekend attack from Hamas militants against Israel pushed Israelis into a severe retaliation against the Palestinian territory of Gaza.

In response to the war, crude prices jumped upwards of four per cent on Monday.

Israel has ordered a Chevron plant to close near Israel’s northern coast, and Hamas also has the financial backing of Iran, one of the world leaders in oil production. Iran has denied any involvement in the attacks and no government worldwide has provided evidence connecting Iran to the attacks.  

Canada and several other Western nations have declared Hamas a terrorist group.

As prices somewhat stabilized Tuesday, oil market experts told BNN Bloomberg that it remains too early to tell how the war might impact prices in the long term.

“History would show us that you tend not to see a meaningful or lasting impact on markets in events such as this,” Philip Petursson, chief investment strategist at IG Wealth Management, said in a television interview on Tuesday.

“This one might be a little more unique in its proximity to the Persian Gulf and we’ve heard about the potential for Iran’s role in what’s been going on and that could escalate.”

Ed Morse, global head of commodity research at Citi Group, said the initial jump in prices is more reactionary than it is telling of what direction oil is headed. 

“We had anticipated a spike as a reflection of really increased risk, but as the market is digesting what’s happening, that’s all potential,” he said.

“There’s no indication that oil supply anywhere in the world is under any kind of attack or vulnerable, but there is obviously a higher probability then there was a week ago.”

Dennis Mitchell, CEO and CIO of Starlight Capital, worries if other commodities are impacted, it could drive prices higher.

“You’re looking at uranium production, if that’s disrupted then that would put upward pressure on energy prices, not to mention any prolonged conflict would probably put downward pressure on economic growth and expansion globally,” he said.

Mitchell also pointed to Russia’s invasion of Ukraine in February 2022, which he noted did have an impact on oil prices, but ultimately spurred development in renewable energy as governments realized that “energy security is national security.”

“You’ve seen a ramp-up in renewable energy programs,” he said. “Now, are we going to be carbon zero by 2050? I have it on good authority that we’re not, but I think the progress toward that goal is what’s important.”

With files from The Associated Press and Bloomberg News