Oil prices fall after Israel avoids energy sites in its strike on Iran
Costs drop as much as 5% in early trade; analysts believe Tehran’s downplaying of attack signals wariness about escalation
HONG KONG, China — Oil prices tumbled Monday with markets relieved that Israel’s strikes on Iran had avoided the country’s energy infrastructure.
Israel carried out airstrikes on military sites in Iran on Saturday in response to Tehran’s massive October 1 ballistic missile barrage, which sent millions of people to shelters and caused some damage to Israel Air Force bases, killed a Palestinian in the West Bank and lightly hurt two civilians in Tel Aviv.
Oil prices fell as much as five percent in early trade before paring some of their losses.
“Israel’s strike, carefully avoiding energy sites, has softened fears of a full-scale conflict with Iran,” said Stephen Innes, analyst at SPI Asset Management.
“Even more telling is Iran’s response, downplaying the attack’s impact and signaling that its warnings may have deterred any more aggressive action from Israel,” he said.
Iran has downplayed Israel’s attack, saying it caused “limited damage” to a few radar systems and that Iranian air defense systems had successfully countered the strikes, an assertion dismissed by Israel, which said all of the operation’s goals — crippling air defenses and missile sites — were achieved.
Analysts say the Islamic Republic’s downplaying of the damages signals the regime’s reluctance to escalate further. Israeli media, however, has reported that Israel expects Iran to respond.
“If tensions cool further or peace talks unexpectedly gain traction, we could see oil slide down to $60 per barrel as traders shift focus back to the looming 2025 supply glut — especially if China’s economic stimulus underwhelms,” Innes added.
Iran said its October 1 strike was retaliation for the killing of a Revolutionary Guards commander and Iran-backed terrorist leaders. Iran has long said it seeks to destroy Israel, but had never attacked the country directly, sufficing with proxy terror groups until an April drone and missile barrage and the October 1 assault.
War broke out on October 7, 2023, when Hamas terrorists — backed by Iran — infiltrated Israel, killing some 1,200 people and kidnapping 251.
Since October 7, Israel has been waging a war on several fronts as it faces incessant threats and attacks from Iranian-backed terror groups in Gaza, the West Bank, Lebanon, Syria, Iraq and Yemen, as well as from Iran itself.
The Times of Israel Community.