Oil prices fluctuate amid Middle East tensions after Israeli military strike
Date
4/21/2024 3:41:00 AM
(MENAFN) Oil prices witnessed a fluctuating trajectory on Friday, initially surging in early trading following Israel's military strike against Iran. The news of the strike propelled oil futures to gains exceeding 3 percent, with brent crude futures surpassing $90. However, this upward momentum was short-lived as prices eventually retreated to $86. John Kilduff, co-founder of Again Capital, remarked on the market's reaction, noting the familiarity of such geopolitical tensions impacting energy markets. He emphasized the difficulty in gauging the true extent of the potential impact on oil supplies amidst heightened tensions in the Middle East.
Providing further insight into the nature of the Israeli strike, Admiral James Stavridis, NATO's former supreme commander, characterized it as "very silent and carefully calibrated." The strike reportedly employed small groups of explosives and drones rather than manned aircraft, underscoring the strategic approach adopted by Israel in its military operations.
Reports of explosions near Isfahan's airport, Iran's third-largest city and home to one of its major nuclear sites, added to the unease in global markets. Despite these incidents, the Iranian Armed Forces assured the security of nuclear facilities in Isfahan province, seeking to allay concerns over potential disruptions to nuclear operations.
The evolving situation in the Middle East cast a shadow of uncertainty over global markets, leading to wide volatility in oil prices, safe-haven assets, and stocks. Kilduff highlighted the primary concern within the oil market, expressing apprehension over the possibility of a strike on Iranian nuclear facilities and the subsequent retaliatory measures from Tehran.
The tension between Israel and Iran intensified following Iran's large-scale air attack, prompting Israel to retaliate with a barrage of more than 300 missiles and drones. This exchange of hostilities, coupled with other geopolitical factors such as the Israeli raid on Iran's embassy compound in Damascus, Syria, kept the markets under pressure in preceding sessions.
As geopolitical dynamics continue to evolve in the Middle East, the uncertainty surrounding potential escalations and their implications for global energy markets remain a focal point for investors and market participants.
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