Crude Oil Prices Lower After Iran Attack on Israel
Oil prices fell on Monday after Iran’s reprisal attack on Israel over the weekend.
Prices had already risen in expectation of action by Iran, with Brent Crude nearing a six-month high last week.
Analysts said Israel’s reaction to the attack would be key for global markets in the days and weeks ahead.
At the end of last week, the price of Brent Crude touched $92.18 a barrel, the highest since October, but early on Monday it had fallen back to around $89.70.
Analysts say that a key issue for the oil price going forward is whether shipping through the Strait of Hormuz will be affected.
The strait – which is between Oman and Iran – is a crucial shipping route, as about 20% of the world’s total oil supply passes through it.
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OPEC members Saudi Arabia, Iran, the UAE, Kuwait and Iraq send most of the oil they export through the strait.
However, April LaRusse, head of investment at Insight Investment, said it was likely that markets would trade sideways until we have more information.
Unfortunately this situation in the Middle East has been going on for some time and the longer you have a bit of geo-political tension going on the more markets wait to see and there isn’t sort of a panic reaction as the first move, she told the BBC’s Today programme.
Share markets in the Asia-Pacific region slipped on Monday as investors weighed the impact of the attack. The UK’s FTSE 100 share index also fell marginally in early trading.
Russ Mould, investment director at investment firm AJ Bell, said the markets had started the week with relative calm.
However, he said gold prices remaining near record highs suggested a continuing nervousness among investors.
