Oil prices fell on Monday after Iran’s reprisal attack on Israel over the weekend, causing fluctuations in the global energy market. Brent crude, a key benchmark for oil prices internationally, was lower but still trading close to $90 a barrel.
Prices had already risen in anticipation of action by Iran, with Brent crude nearing a six-month high last week. Analysts are closely monitoring how the conflict could impact global supply chains, as oil price fluctuations can have ripple effects across the world due to the heavy reliance on the commodity for fuel production.
When Russia invaded Ukraine in 2022, oil prices soared to $120 a barrel, leading to higher costs of living worldwide. The recent attack by Iran on Israel has caused a drop in the price of Brent crude from $92.18 to around $89.50 a barrel.
Israeli Defence Minister Yoav Gallant stated that the confrontation with Iran is “not over yet,” indicating potential further escalation. The markets are waiting to see how Israel will respond to Iran’s move in the coming days and weeks.
Energy analyst Vandana Hari noted that the fall in oil prices suggests that the market does not currently see an additional supply threat. However, Peter McGuire from trading platform XM.com predicted volatility in the energy market and a potential surge in oil prices if Israel responds strongly to Iran.
Share markets in the Asia-Pacific region and the UK’s FTSE 100 index fell marginally in response to the attack, reflecting investor nervousness. The situation remains tense, with concerns about the impact on energy prices and inflation if a wider conflict erupts in the Middle East.