Oil steadied as the US intensified diplomatic efforts to contain the crisis in Gaza, with President Joe Biden to visit Israel this week to spearhead his administration’s drive to prevent a regional conflagration.

West Texas Intermediate held above $86 a barrel after a period of volatile trading over the last week. Biden will travel to the country on Wednesday to show his support after the Oct. 7 attacks by Hamas that sparked the conflict. At the same time, Israel is still making plans for a ground offensive into Gaza.

Beyond the conflict, stronger-than-expected US retail data created a fresh headwind for prices, sending the dollar higher and making commodities priced in the currency more expensive. 

The crude market has been left on edge by the sudden crisis in the Middle East amid concern that it risks spreading beyond Israel and Gaza, potentially endangering crude flows from key producers. Iran, which supports Hamas, has warned that an expansion of the war was “approaching the inevitable stage.” In addition to roiling futures markets in recent days, the conflict has also upended options pricing and sent freight costs soaring. 

“De-escalation is the theme of this week and that is coming from all different political sides, whether that’s Washington, Jerusalem or Tehran,” Louise Dickson, an analyst at Rystad Energy said in an interview with Bloomberg Television. “Iran is the linchpin. Everything depends on what Iran does.” 

Oil demand is showing robust growth, but there has also been extra supply despite the cuts from some members of OPEC+, Vitol CEO Russell Hardy said at the Energy Intelligence Forum in London, which was disrupted by protests.

Meanwhile, crude traders will track events in Barbados, where Venezuela’s government may sign a deal with the opposition later on Tuesday. If concluded, such an agreement could pave the way for the US to ease sanctions against the country, potentially boosting oil exports.

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