Despite direct strikes between Israel and Iran this week, oil prices saw a significant drop of about 3%. U.S. crude oil futures closed at $83.14 a barrel, the lowest they have been since late March.
Investors seemed relieved as Israel’s limited retaliation against Iran provided an opportunity for Iran to de-escalate the situation, ultimately erasing the risk premium associated with tensions between the two countries.
The international community’s pressure on Israel to show restraint may have also played a role in preventing further escalation. Experts are optimistic about the likelihood of a sustained war between Israel and Iran, citing the distance between the two countries and their military capabilities.
The bar for all-out war in the Middle East is set high, with diplomatic resolutions typically preventing any major disruption to oil supplies. As tensions simmer down and both countries assess their next moves, the market seems to be stabilizing in response to the recent events.
Overall, the outlook for oil prices remains relatively stable amid the Israel-Iran conflict, with many hoping for a peaceful resolution to the ongoing tensions in the region. Stay tuned to The Puck Drop for more updates on this developing story.
