After Iran launched a missile attack on a US airbase, the price of crude oil in the international market dropped sharply. Despite rising tensions in the Middle East, experts believe that global oil supply won’t be affected immediately. (Source: The Guardian)
WTI Crude Falls by 7%
On Monday, 23 June, the price of West Texas Intermediate (WTI) crude oil suddenly fell by 7%, dropping to $68.51 per barrel.
This price drop came right after Iran’s missile attack on the Al Udeid US airbase in Qatar.
Market analysts think that even though the situation is tense, it will not directly disrupt global fuel exports for now.
No Casualties: Attack Called ‘Symbolic’ by US
There were no reported casualties from the attack.
The US Department of Defence described the missile strike as a “mostly symbolic attack.”
Earlier on Saturday, the United States carried out airstrikes on three nuclear facilities in Iran, which likely triggered the retaliation.
Read More: Top US Military Leaders Gather in White House Situation Room
Hormuz Strait Still Open Despite Threats
Although Iran’s Parliament voted in Favor of closing the Strait of Hormuz, this key waterway is still open.
The Strait of Hormuz is one of the most important routes for global oil and gas trade, carrying about 20 million barrels of oil and large amounts of liquefied gas daily.
Experts Say Iran May Avoid Closing Hormuz
Even though there are fears that Iran could block the strait, experts believe the possibility of that happening now is low.
Matt Smith, an analyst from the research group Kpler, said:
“It seems Iran is choosing a less damaging path between two bad options. They may not go for closing the Strait of Hormuz.”
Focus on US Bases and Israel Instead of Oil Disruption
John Kilduff, a partner at Again Capital, said:
“At this moment, oil flow is not Iran’s main target. There’s less chance it will be disrupted. Iran may focus more on hitting US bases or Israeli civilian targets.”
Stock Markets Stay Mostly Stable
The geopolitical tension had little impact on the US stock market.
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In New York, the S&P 500 rose by 0.6%, and the Dow Jones increased by 0.5%.
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However, in other markets:
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London’s FTSE 100 index dropped by 0.2%,
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Tokyo’s Nikkei 225 index fell by 0.1%.
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Investors Growing Weary of Geopolitical Tensions
John Canavan, chief analyst at Oxford Economics, explained:
“Since the beginning of the year, investors have faced many crises and uncertainties. As a result, their reaction to geopolitical risks has become weaker and less emotional.”
Source: Channel 24
