U.S. crude oil futures were slightly lower on Sunday following Israel’s successful defense against a large-scale air assault by Iran. The U.S. also emphasized its desire to avoid a wider war in the Middle East. The West Texas Intermediate contract for May lost 34 cents to $85.32 a barrel, while June Brent futures eased slightly to $90.18 a barrel. Iran launched more than 300 drones and missiles against military targets in Israel on Saturday, which President Joe Biden described as “unprecedented.” The U.S. intervened to help Israel shoot down most of the incoming munitions.
Although the Iranian attack was significant in scale, it caused little actual damage in Israel. The Nevatim Air Force Base suffered slight damage and there were reported injuries. Energy experts are now waiting to see how Israel will respond to the attack and whether it could lead to a direct war between Israel and Iran, which could significantly impact the crude oil market. The air assault marked the first time Iran has directly attacked Israeli territory, and it involved launching missiles and drones from various locations in the region.
Senior U.S. military officials reported that over 100 ballistic missiles, land attack cruise missiles, and drones were fired at Israel as part of the attack. The U.S. and Iran both expressed a desire to avoid further escalation, with Biden reaffirming the U.S.’s commitment to Israel’s security while also stating that they would not participate in offensive operations against Iran. Iran described the attack as a limited operation in self-defense following a previous strike on its diplomatic facilities in Syria by Israel earlier in the month.
Iran warned the U.S. against intervening in the conflict between Iran and Israel, stressing that the U.S. should stay out of the matter. The Israel Foreign Ministry stated that Iran must face consequences for its aggression and called for the Islamic Revolutionary Guards to be declared a terrorist organization. They emphasized Israel’s right to self-defense and vowed to continue defending against Iranian aggression. The coming hours and days will be crucial in determining the potential escalation of the situation and its impact on the region.
Overall, the crude oil market is closely monitoring the situation between Israel and Iran, as any further escalation could lead to a wider conflict with significant geopolitical implications. The response from Israel and Iran in the aftermath of the air assault will be key in determining the next steps in this tense situation. The U.S. is also closely involved in the situation, with President Biden expressing a desire to avoid a wider conflict with Iran while reaffirming the U.S.’s commitment to Israel’s security. The tensions in the Middle East continue to pose risks for oil prices and global stability, with the potential for further escalation causing concern among traders and market participants.
