• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 days They pay YOU to TAKE Natural Gas
  • 13 hours How Far Have We Really Gotten With Alternative Energy
  • 17 hours What fool thought this was a good idea...
  • 3 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 10 days The United States produced more crude oil than any nation, at any time.
Putin Meets With Xi Jinping As Sanctions Weigh on Russian Economy

Putin Meets With Xi Jinping As Sanctions Weigh on Russian Economy

Russian President Vladimir Putin visited…

Oil Prices Start the Week Lower Despite Iran Attack on Israel

Crude oil prices began trade today with a decline following Iran’s retaliatory strike on Israel that the latter said had only done limited damage.

"An attack was largely priced in the days leading up to it. Also, the limited damage and the fact that there was no loss of life means that maybe Israel's response will be more measured," ING’s Warren Patterson said, as quoted by Reuters.

"But clearly, there is still plenty of uncertainty and it all depends on how Israel now responds," the Dutch bank’s head of commodity strategy also said.

Indeed, the degree of geopolitical uncertainty rose significantly despite the fact that Iran’s retaliation was a non-surprise, as the West seeks a diplomatic way out of a further escalation while both Iran and Israel vow to respond to each other’s next moves reciprocally.

ING’s Patterson and commodity strategist Ewa Manthey said in a note from earlier today that Iran had signaled the drone strike “concluded” the whole affair for it but it was not certain whether Israel saw things the same way.

Naturally, this has heightened risks around oil supply from the Middle East, and especially Iran, which despite sanctions has boosted its output to some 3 million barrels daily and is currently the fourth-largest producer within OPEC.

In this context, according to the Dutch bank, there were two risks inherent to oil supply in the situation. First, the U.S. could tighten the sanction noose because of the strike on Israel and prompt cuts in output. Second, Israel could retaliate by targeting Iranian energy infrastructure, again affecting supply.

Sanctions could take some Iranian output off the market, per ING, but an Israeli attack on infrastructure could cause more significant supply losses. Should this happen, oil prices will have much higher to go, even though the ING analysts pointed to a possible new release of oil from the U.S. SPR and OPEC’s spare capacity.


By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News