Oil prices dropped sharply after Iran’s retaliatory missile strike on a US airbase reduced concern that the country was poised to strain energy markets by closing off a vital trade route.
Crude oil prices sank by 7% on Monday, with West Texas Intermediate (WTI) futures dropping to $68.51, as the Iranian action on the al Udeid base in Qatar raised hopes that the conflict would not immediately disrupt oil supplies from the region.
No casualties were reported after the strike, which the US defense department described as “largely symbolic” after the US bombed three nuclear sites in Iran on Saturday.
While the Iranian parliament voted to close the strait of Hormuz – through which more than a fifth of the world’s oil supply, 20m barrels, and much of its liquefied gas passes each day – it has so far remained open.
“It is somewhat the lesser of the two evils,” said Kpler analyst Matt Smith. “It seems unlikely that they’re going to try and close the strait of Hormuz.”
John Kilduff, a partner at Again Capital, said: “Oil flows, for now, aren’t the primary target, and are likely not to be impacted. I think it’s going to be military retaliation on US, bases and/or trying to hit more of the Israeli civilian targets.”
US stocks also rose slightly, with the benchmark S&P 500 up 0.6% and the Dow Jones industrial average up 0.5% in New York, on a broadly muted day of trading in the global equity markets.
Other leading indices struggled for direction. The FTSE 100 closed down 0.2% in London. The Nikkei 225 finished down just 0.1% in Tokyo.
Investors have become “jaded to geopolitical risks and greater uncertainty after the events throughout this year so far”, John Canavan, lead analyst at Oxford Economics, observed earlier on Monday.
Qatar reopens airspace after brief suspension, civil aviation authority says
Qatar has reopened its airspace after a brief suspension, its civil aviation authority said early on Tuesday (local time), following a missile attack by Iran on an American air base in Qatar on Monday that caused no injuries.
Iran ready to respond again in case of any further aggression from US, foreign minister says
Iran’s foreign minister Abbas Araghchi said that Tehran’s attack on the US military base al Udeid in Qatar came in response to the US “aggression against Iran’s territorial integrity and sovereignty”.
He said Iran will be ready to respond again in case of further action by the US, according a statement posted by the Iranian foreign ministry’s account on Telegram.
Escalation in region started with Israel’s ‘irresponsible practices’, says Qatari spokesperson
What is more, Qatar’s foreign ministry spokesperson Majed Al Ansari said this escalation started with Israel’s “irresponsible practices” in Gaza, the West Bank, Lebanon, Syria and Iran.
He also said Qatar’s mediating role in the region would be undeterred “by any wrongdoing from any party”. (Qatar has been acting as a key third-party mediator on a number of geopolitical issues including mediating ceasefire negotiations between Israel and Hamas).
Qatar says response to Iran attack is a ‘sovereign’ issue
Qatar has said that its response to the Iranian attack on its al Udeid US air base is a “sovereign” issue, after Iran attacked the base in retaliation for US strikes on its nuclear sites over the weekend.
“There are deep ties between the two states [Iran and Qatar] and the two nations, but the attack undoubtedly calls for a genuine meeting and a clear stance,” foreign ministry spokesperson Majed Al Ansari said in a press conference.
He said 19 missiles in two separate strikes were launched from Iran towards the al Udeid air base, only one of which was not thwarted. (This is consistent with what Trump said earlier about one missile being “set free” as it was “heading in a non-threatening direction).
Following Iran’s strikes, some debris had fallen in residential areas, but no casualties were recorded, Al Ansari said.
He said Qatar would announce the reopening of its air space soon, and said communication was ongoing with different parties including with the US.
The United States helped around 170 US citizens, permanent residents and their immediate family members leave Israel on Saturday and Sunday, a US state department official said on Monday.
The assisted departures from Israel come as tensions have risen in the Middle East, after Donald Trump joined Benjamin Netanyahu’s air war by dropping massive “bunker-buster” bombs on Iran’s nuclear production sites on Sunday. Since then, Iran has retaliated with strikes on the al Udeid US air base in Qatar.
The state department official said that on Sunday that three flights departed Israel with approximately 100 US citizens, permanent residents and their accompanying immediate family members.
The assisted departure flights began on Saturday, when the official said the state department organized two flights that departed from Tel Aviv to Athens with approximately 70 US citizens, their accompanying immediate family members, and permanent residents.
Russian foreign ministry calls for halt to escalation over Iran
Russia’s foreign ministry has issued a new call for a halt to “escalation of armed conflict” and “provocative actions” in the conflict pitting Iran against the United States and Israel.
“We once again call for a halt to the unleashing of armed escalation and an end to provocative actions and rhetoric,” the ministry said in a statement on Telegram. “Today, more than ever, it is vital to return to political and diplomatic efforts and compliance with international law.”
The statement also called for an immediate end to the “unprovoked aggression of the US and Israel against Iran, open attempts at regime change and encroachment on the sovereignty of nations”.
If that all sounds very rich, you can read the latest developments from Russia’s war in Ukraine in today war briefing here
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