Iran-Israel tensions: Oil prices lower after attack

Oil prices fell in early Asian trading after Iran’s retaliation against Israel over the weekend.

Brent crude – a key benchmark for oil prices internationally – was down but still trading near $90 a barrel Monday morning.

Prices had already risen in anticipation of action from Iran, with Brent crude approaching a six-month high last week.

Israeli Defense Minister Yoav Gallant said the confrontation with Iran was “not over yet.”

“Clearly, the oil market does not see the need to factor in an additional threat to supply at this stage,” said energy analyst Vandana Hari.

Brent crude could well fall below $90, but a significant pullback is unlikely as traders remain focused on risks associated with conflicts in Gaza and Ukraine, she added.

Analysts also said that Israel’s response to the attack will be decisive for global markets in the days and weeks to come.

“I think we will naturally see some volatility. If there were to be some sort of countermeasure on the part of Israel, then that, I think, would propel the energy markets very much higher,” he said. said Peter McGuire of trading platform XM.com. the BBC.

Stock markets in the Asia-Pacific region also fell on Monday as investors weighed the impact of the attack.

Hong Kong’s Hang Seng, Japan’s Nikkei and South Korea’s Kospi were all down more than 1% in morning trading.

Iran launched drones and missiles towards Israel this weekend after promising to retaliate for an attack on its consulate in Damascus, the Syrian capital, on April 1.

Israel has not said it carried out the attack on the consulate, but it is widely believed to be behind it.

Late last week, the price of Brent crude touched $92.18 a barrel, its highest level since October, before falling back to close at $90.45.

Iran is the world’s seventh-largest oil producer, according to the U.S. Energy Information Administration, and the third-largest member of the OPEC cartel of oil producers.

Analysts say a key question for the future of oil prices is whether shipping through the Strait of Hormuz will be affected.

The strait – which lies between Oman and Iran – is a crucial shipping route, as around 20% of the world’s total oil supply passes through it.

OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq send most of the oil they export through the strait.