2024-04-15 01:17:00
They fell in Asia on Monday, with investors cutting risk premiums in the wake of the Iranian attack on Israel late Saturday. The incident, which Israel described as causing limited damage, caused June crude futures to fall by 24 cents to $90.21 a barrel, and West Texas Intermediate crude futures for May delivery to fall by 38 cents to $85.28 a barrel as of 1256 GMT.
This attack, which included more than 300 missiles and drones, is the first aggression of its kind against Israel by another country in more than 30 years. Initially, there were fears that this would lead to a broader regional conflict that could disrupt oil flows through the Middle East.
However, damage from the attack was minimal, as many of the missiles were intercepted by Israel’s Iron Dome defense system. Iran stated that the attack was in response to an air strike on its consulate in Damascus, but Israel did not confirm or deny its responsibility for the attack on the consulate.
Although the Israeli war cabinet favored a response, the United States indicated that it would not participate in any military action against Iran. Calls for restraint came from world powers, Arab countries, and the Secretary-General of the United Nations.
The IG market analyst noted that the scale of the Iranian retaliatory attack appears to be a measured response, and is unlikely to spark further escalation at this time. Oil prices rose on Friday in anticipation of Iranian retaliation, reaching their highest levels since October. However, the week ended with oil prices falling almost 1% after the International Energy Agency revised its oil demand growth forecast by lowering its forecast for this year.
Analysts had expected a brief rise in oil prices on Monday morning due to the attack, which Rystad Energy described as an “unprecedented and dangerous development” in a volatile region. However, analysts also said that a larger and more lasting impact on oil prices would likely require a major supply disruption, such as problems affecting shipping through the Strait of Hormuz near Iran.
So far, the ongoing conflict between Israel and Hamas militants in Gaza has not had a significant impact on oil supplies. In addition, Sycamore noted that persistent inflation in the United States, creating uncertainty around Federal Reserve interest rate cuts, also contributed to pressure on oil prices. Despite this, he noted that medium-term risks for crude oil are still skewed to the upside, with the potential to reach around $90 due to continued geopolitical instability in the Middle East and Europe.
Reuters contributed to this article.
This article was written and translated with the help of artificial intelligence and reviewed by an editor. For more information, see the terms and conditions.
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