The price of oil has surpassed $80 per barrel, and an oil analyst has warned of a "phase of deterioration" in the Middle East.

• The assassination of Hamas political leader Ismail Haniyeh by Iran led to the topping of the $80-per-barrel-threshold in Brent futures, reigniting tensions in the Middle East.
• Rapidan Energy Group's Clay Seigle stated that the Middle East is entering a phase of deterioration that will likely attract the attention of oil traders and cause them to increase the risk premium in the price of Brent. Seigle predicts that at least $5 per barrel will be added to the price before any potential physical supply disruption is seen.

On Wednesday, the price of oil surpassed the $80-per-barrel-threshold, coinciding with the escalation of tensions in the Middle East following Iran's assertion that Hamas political leader Ismail Haniyeh had been assassinated.

The Ice Brent contract with a September expiration date was trading at $80.32 per barrel at 09:45 a.m. London time, up 2.15% from the Tuesday close price. Meanwhile, the front-month September Nymex WTI futures were at $76.55 per barrel, up 2.44% from the previous day's settlement.

Amid escalating tensions in the oil-rich Middle East, where Israel is currently engaged in a conflict with Iran-backed Hamas, the Jewish state's decision to retaliate against the militant group has led to a broader conflict with other Iran-supported factions, including Lebanon's Hezbollah and Yemen's Houthi. As a result, oil prices have risen, with some experts predicting a further increase in the near future.

On Wednesday, the Revolutionary Guard of Iran accused Israel of assassinating Hamas political bureau chief Ismail Haniyeh at his home in Tehran. Ayatollah Ali Khamenei stated that it is Iran's responsibility to retaliate against Israel for this action, as reported by the Islamic Republic News Agency.

The Israeli Ministry of Foreign Affairs and Prime Minister's Office have been contacted by CNBC for comment.

The escalations in the Middle East, which were occasionally intensified by Yemeni maritime attacks and direct hostilities between Israel and Iran or Hezbollah, have not yet caused significant disruptions in oil markets.

According to Clay Seigle, director of the global oil service at Rapidan Energy Group, oil traders have been mispricing geopolitical risks in the Middle East, resulting in a sanguine market despite an expected disruption of barrels due to Russia's war in Ukraine and a 10-month simmering war in the Gaza enclave.

"We are now entering a phase of deterioration in the Middle East that we believe will attract oil traders' attention and cause them to increase the risk premium in the price of Brent. We anticipate a minimum of $5 per barrel increase, even before any potential physical supply disruption," he stated.

The recent events have led to a significant decline, which could lead us out of the current phase of controlled escalation between the sides since October 7th and take us into new territory for oil and gas markets.

Some analysts doubted the effectiveness of the recent increase in oil prices in maintaining long-term stability.

According to Tamas Varga, an oil analyst at PVM Associates, the assassination that occurred on Iranian soil has increased the risk of supply disruption, which has led to a rally in oil prices.

"Nonetheless, I believe that its supportive impact will not endure unless there is a clear and present danger to physical output from the region."

UBS analyst Giovanni Staunovo echoed the sentiment.

"The escalation of tensions in the Middle East has led to a rise in crude prices, but geopolitical risk premia in oil only persist if there are supply disruptions. Despite this, the reaction of oil prices has been muted, as no supply disruptions have occurred yet," he said to CNBC.

As the Joint Ministerial Monitoring Committee of OPEC+ prepares to meet on Thursday to assess compliance with production quotas, the price movement occurs. Although the committee lacks the power to modify the coalition's official output strategy, it can call a full-fledged ministerial meeting if market conditions necessitate it.

The OPEC Secretariat on July 24 announced that it had received information from OPEC+ members Iraq, Kazakhstan, and Russia about their plans to compensate for the overproduction they had done in the first half of the year by making additional output cuts between July 2024 and September 2025.

European oil majors are set to release their earnings reports during the same week, with Shell following BP's lead and posting its own earnings on Thursday.