Oil prices dropped 6% on Monday after an Israeli attack over the weekend did not damage Iranian energy facilities.
On October 27, Israel retaliated against Iran’s military installations in three provinces. Although the state-owned Islamic Republic News Agency reported that four soldiers perished, the attack avoided oil, nuclear, and civilian infrastructure, and Iran’s oil industry operations are “underway normally” with no disruptions.
International benchmark Brent crude dropped 6.13% to $71.39 per barrel, while the West Texas Intermediate fell 6.35% to $67.22 a barrel.
For weeks, markets had braced for Israeli retaliation due to rising tensions in the region, especially since Iran accounts for up to 4% of global oil supplies. However, given the current situation, Citi analysts have forecasted a decrease in Brent oil prices to $70 per barrel over the next three months.
Andy Lipow, president of Lipow Oil Associates, noted that Israel was deliberately avoiding targeting crude oil facilities, possibly influenced by the U.S. Nevertheless, oil markets continue to face a global oversupply issue, as production has been increasing in several countries.
Market attention now shifts to ceasefire talks between Hamas and Israel, as well as between Israel and Hezbollah, which resumed over the weekend. Analysts, however, still express doubts about achieving a lasting ceasefire, despite Israel’s low-aggression response, raising concerns about future market stability.
