Oil drops by over 4% as Israeli airstrikes avoid targeting Iran’s energy facilities
Oil prices dropped by over 4% on Monday morning in Asia. This happened after Israeli airstrikes targeted areas outside Iran’s nuclear and energy facilities. The strikes reduced fears of possible disruptions to the Middle East’s energy supply, which had earlier caused prices to rise.
Oil Prices Drop
The price of West Texas Intermediate (WTI) crude oil fell by 4.8% to $68.4 per barrel as of 7:31 am AST on Monday. Similarly, Brent crude dropped 4.6% to $72.5 per barrel around the same time.
Israel launched a military strike against Iran, but it was less severe than expected. Earlier, there were threats of targeting Iran’s energy and nuclear facilities. This softer response eased tensions and reduced the impact on the global oil market.
On Friday, oil prices fell by about 2.2%. However, for the entire week, they still rose by 4%. The weekly increase was mainly due to the ongoing Middle East conflict and uncertainty over Israel’s response to Iran’s missile attack on October 1, as well as the upcoming U.S. elections on November 5.
Israel’s Counterattack
Early Saturday morning, Israeli jets launched missiles at weapons factories and other sites near Tehran, Iran’s capital, and in western Iran.
According to Reuters, oil prices had risen earlier due to fears of Israel’s counterattack, but after the attack, prices eased a bit. Market experts say that since the strikes were limited and avoided hitting oil facilities, there’s hope for less tension.
Saul Kavonic, an energy analyst from Sydney, said the market is now waiting to see if Iran retaliates in the coming weeks. If Iran does respond, oil prices could go up again.
Vivek Dhar, an analyst at the Commonwealth Bank of Australia, believes the focus will now shift to ceasefire talks between Israel and the Iran-backed group Hezbollah, which restarted over the weekend. However, Dhar doubts that a lasting peace deal will happen soon.
Citi analysts have lowered their forecast for Brent crude oil prices from $74 to $70 per barrel, as the immediate risk has reduced.
Published: 28th October 2024
Also Read:
QatarEnergy and ExxonMobil have received more time to finish building their LNG plant in Texas
Bahrain’s GFH has issued five-year Islamic bonds (sukuk) worth $500 million, attracting strong interest from international investors
Saudi Arabia’s non-oil exports grew by 7.5% in August, driven by the re-export sector
