OIL prices slipped more than $5, or 7 per cent, yesterday after touching a five-month high as Iran attacked the US military base in Qatar in retaliation for US attacks on its nuclear facilities, and took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz.
Brent crude futures closed down $5.53, or 7.2pc, at $71.48 a barrel, while US West Texas Intermediate crude (WTI) eased $5.53, or 7.2pc, to $68.51.
Brent’s 7.2pc drop was the steepest since August 2022. The benchmark traded in a $10 range, the widest since July 2022. Both benchmarks were down nearly 9pc in after-hours trading.
“Oil flows for now aren’t the primary target and is likely not to be impacted, I think it’s going to be military retaliation on US bases and/or trying to hit more of the Israeli civilian targets,” said John Kilduff, a partner at Again Capital.
At least two supertankers made U-turns near the Strait of Hormuz following US military strikes on Iran, ship tracking data shows, as more than a week of violence in the region prompted vessels to speed, pause, or alter their journeys.
About a fifth of global oil supply flows through the strait. However, the risk of a complete shutdown is low, analysts have said.
A telegraphed attack on a well defended US base could be a first step in reducing tensions provided there are no US casualties, Energy Aspects said in a post.
“Unless there are indications of further Iranian retaliation or escalation by Israel/the US then we may see some geopolitical risk premium come out of the price in subsequent days,” it said.
Investors are still weighing up the extent of the geopolitical risk premium, given the Middle East crisis has yet to crimp supply.
HSBC expects Brent prices to spike above $80 a barrel to factor in a higher probability of a Strait of Hormuz closure, but to recede again if the threat of disruption does not materialise, the bank said on Monday.
Iraq’s state-run Basra Oil Company said international oil majors including BP, TotalEnergies and Eni had evacuated some staff members working in oilfields.
&uuid=(email))