Oil Prices Fall as Iran Strike Fears Recede

15 Apr 2024 , 09:23 AM

Monday’s opening oil prices in Asia decreased as market players reduced risk premiums in the wake of Iran’s late-night attack on Israel, which the Israeli government claimed had caused little damage.

West Texas Intermediate (WTI) futures for May delivery were down 38 cents at $85.28 a barrel, while Brent futures for June delivery dropped 24 cents to $90.21 a barrel.

This was the first foreign attack on Israel in over thirty years, involving over 300 missiles and drones. It has sparked worries about how a wider regional conflict may impact Middle Eastern oil transportation.

However, the attack—which Iran described as reprisal for an airstrike on its consulate in Damascus—only caused minor harm since Israel’s Iron Dome defence system shot down the missiles. Israel, which is fighting Hamas militants in Gaza who are supported by Iran, has not acknowledged or denied hitting the consulate.

The U.S. declared it would not participate in any offensive against Iran, despite Israeli officials claiming that the war cabinet of the nation supported reprisal. The UN secretary general, other Arab countries, and global powers have all called for moderation.

Anticipating an Iranian counterattack, oil benchmarks rose on Friday, reaching their highest levels since October.

However, despite this, prices closed the week almost 1% lower as the International Energy Agency revised down its prediction for this year’s growth in oil demand.

Even while Israel only suffered minor losses, most analysts were still anticipating at least a brief price increase this morning.

Analysts predicted that a major disruption to supply, such as restrictions on shipping in the Strait of Hormuz near Iran, would be necessary for more substantial and long-lasting price consequences from the increase.

Thus far, the Israel-Hamas conflict has not significantly affected the availability of oil.

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