During Monday’s trading session, oil prices experienced a decline as market participants reduced risk premiums following Iran’s attack on Israel late Saturday, which the Israeli government stated caused limited damage.
Brent futures for June delivery decreased by 23 cents, or 0.2%, to $90.22 a barrel, while West Texas Intermediate (WTI) futures for May delivery were down 29 cents, or 0.3%, at $85.37 a barrel by 0430 GMT.
The attack, which involved more than 300 missiles and drones, marked the first direct assault on Israel from another country in over three decades, sparking concerns about a potential wider regional conflict that could disrupt oil traffic through the Middle East. However, despite these concerns, the attack caused only modest damage, with Israel’s Iron Dome defense system intercepting several incoming missiles.
Iran stated that the attack was retaliation for an airstrike on its consulate in Damascus, though Israel has neither confirmed nor denied responsibility for the strike.
Warren Patterson, head of commodities strategy at ING, noted, “An attack was largely priced in the days leading up to it. Also, the limited damage and the fact that there was no loss of life means that maybe Israel’s response will be more measured.”
The situation underscores the delicate balance in the region and its potential impact on global oil markets, with investors closely monitoring developments for any signs of escalation or de-escalation.
As the situation continues to evolve, market participants will remain vigilant, assessing geopolitical tensions and their implications for oil supply and prices.
This story highlights the interconnectedness of geopolitical events and commodity markets, underscoring the importance of geopolitical stability for global economic stability.
