Oil prices plunged by 4% on Monday as geopolitical tensions eased after Israel’s retaliation on Iran was less severe than previously feared and no energy facility was targeted.
The international oil benchmark of Brent crude declined 4.4% to $72.17 per barrel at 11.49 am local time (0849 GMT), down from the previous session’s close of $75.55.
The US benchmark West Texas Intermediate also fell by 4.7% to $68.17 per barrel, compared to $71.56 at the prior session’s close.
Over the last month, both benchmarks increased with concern that Israel’s attack on Iran would lead to a wider regional war and disrupt oil supply in the Middle East, where most of the oil resources are located.
Following Israel’s attack on Iran, oil prices plummeted at the beginning of the week as the air strike on Iran left oil facilities unaffected and the risk perception in global markets decreased.
Israel announced that it launched an attack on military targets in Iran on October 26 as retaliation for Iran’s missile attacks on October 1. The Israeli army said the attack was completed ‘successfully’.
Iran said that some military points in Tehran and the Khuzestan and Ilam provinces in the west of the country were targeted and their air defense systems successfully resisted the attacks with limited damage.
In response, Iranian President Masoud Pezeshkian said that they did not want war, but they would protect their rights and respond appropriately to Israel’s aggression.
Also, the rise of the US dollar against other currencies aided the decline in oil prices. The strong dollar is expected to reduce demand by making oil more expensive for foreign currency users.
The US dollar index increased by 0.3% to 104.400 on Monday compared to Friday’s close of 104.132.
