Unexpectedly: oil prices fall by $3 after Israel’s “gentle” strikes on Iran
28 October 2024 09:53
Oil prices plunged by more than $3 a barrel on Monday after Israel’s retaliatory strike against Iran missed the country’s oil and nuclear facilities and did not disrupt energy supplies. This has significantly eased geopolitical tensions in the Middle East, reports "Komersant Ukrainian" reports with reference to Reuters.
Both key crude oil grades – Brent and US WTI – hit their lowest levels since 1 October. As of seven in the morning Kyiv time:
- Brent was trading at $72.59 per barrel, down $3.46 (4.6%);
- WTI was down $3.37 (4.7%) at $68.41 per barrel
Last week, oil prices rose by 4% amid volatile trading as markets took into account uncertainty over the extent of Israel’s response to the Iranian missile attack on 1 October and the upcoming US elections.
On Saturday before dawn, dozens of Israeli jets carried out three waves of strikes on missile factories and other targets near Tehran and in western Iran, marking another exchange of blows in the conflict.
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According to analysts, the “geopolitical risk premium” to the oil price, which was formed in anticipation of a retaliatory strike by Israel, has decreased. The limited nature of the strikes, including the avoidance of oil infrastructure, has raised hopes for de-escalation.
Analysts expect market attention to now focus on the ceasefire talks between Israel and the Iranian-backed Hamas group, which resumed over the weekend.
The Brent price forecast for the next three months has been lowered to $70 per barrel from $74, given the decline in the risk premium in the short term.
In October, OPEC kept its oil production policy unchanged, including a plan to increase production from December. The next meeting of the group is scheduled for 1 December.
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