Oil prices opened lower on Monday, despite recent geopolitical tensions as Israel launched a counterattack on an Iranian military facility over the weekend, resulting in four casualties.
Brent crude dipped more than 4%, trading below $73 per barrel, according to insights from ING commodities strategists.
The decline in prices came despite Israel’s response to Iran’s prior missile attack, which had initially raised concerns about potential disruptions in the oil market. Analysts noted that Israel’s counterstrike was restrained, specifically targeting Iranian air defense and missile production facilities, rather than key energy or nuclear infrastructures.
This selective response has eased market fears, with ING stating that the restrained approach allows room for possible de-escalation.
“The price action in oil this morning suggests that the market anticipates a controlled situation, reducing the likelihood of prolonged disruption,” ING stated.
Iran, on its part, downplayed the incident, with Supreme Leader Ayatollah Ali Khamenei cautioning against exaggerating the damage. While the potential for further retaliation remains unclear, market analysts suggest a de-escalation could stabilize prices in the long run. “With a surplus market anticipated into 2025, oil prices could stay under pressure,” ING added.
Meanwhile, Baker Hughes data revealed a drop in U.S. oil rigs last week, with the count down by two to 480, marking a decrease of 24 rigs from the same period last year. At Friday’s close, Brent crude stood at $75.55 per barrel, while the American benchmark, West Texas Intermediate, was priced at $71.56.
