Oil Prices Plummet as Iran Launches Attack on US Military Base in Qatar
In a retaliatory move against American strikes on Iranian nuclear facilities, Iran launched an attack on a US military base in Qatar. This resulted in a more than six per cent drop in oil prices on Monday.
The impact was felt immediately in the market, with West Texas Intermediate futures dropping 6.5 per cent to $69.96 per barrel, and Brent crude futures falling 6.4 per cent to $72.07 per barrel—reaching their lowest level in 10 days.
Fortunately, a US defence official confirmed that no American personnel were harmed in the missile strike. Analysts also noted that the attack did not target key oil installations, which helped mitigate the potential impact on oil production.
John Kilduff of Again Capital described Iran’s response as “somewhat measured” and noted that the attack was directed away from populated areas. This calculated move by Iran could be seen as a face-saving measure, with hopes for a diplomatic resolution to follow.
The growing tensions between Iran and Israel have raised concerns about the security of the vital Strait of Hormuz, a key maritime route for global oil shipments. Iran has previously threatened to close the strait during times of heightened tension, although it has never followed through on this threat.
Despite the escalation in tensions, Kilduff believes that the immediate risk to oil supplies remains limited. He stated, “It’s pretty clear that this is not going to turn into—at least right away—any kind of disruption to oil flows in the region, particularly through the Strait of Hormuz.”
