U.S. President Joe Biden's administration is likely to tighten crude oil sanctions against OPEC member Iran in response to the Islamic Republic's backing of Palestinian militant group Hamas, according to Helima Croft, head of global commodity strategy at RBC Capital Markets.
Her comments come ahead of a widely expected ground offensive by Israel into Gaza, a move that Croft believes could set the tone for the West's response to Iran.
It has been more than two weeks since Israel announced a "complete siege" on the Gaza Strip, cutting off food, water, fuel and electricity supplies after a devastating Hamas attack.
"It certainly looks like the United States is trying to delay an Israeli ground operation because they want to get out the hostages, they want to get out the hundreds of Americans that are trapped in Gaza, but the question is, is this going to be postponed indefinitely, but I think people are bracing for some type of escalation in Gaza," Croft told CNBC's Dan Murphy in Saudi Arabia on Wednesday.
She described the oil price reaction to the Israel-Hamas war as "sanguine" so far, but nevertheless said "a lot's going to hinge on what does a potential ground operation look like" and that a widening of the conflict into the broader Middle Eastern region could affect the crude supplies of Iran.
Persons:
Joe Biden's, Helima Croft, Croft, CNBC's Dan Murphy
Organizations:
OPEC, Hamas, RBC Capital Markets, Israel
Locations:
Iran, Israel, Gaza, United States, Saudi Arabia