Oil prices dropped sharply on Monday after Iran launched a retaliatory attack on a United States military base in neighbouring Qatar, following American airstrikes on Iranian nuclear facilities over the weekend.
By 18:15 GMT, West Texas Intermediate futures had fallen by 6.5 percent to $69.96 per barrel, while Brent crude declined by 6.4 percent to $72.07, marking its lowest level in ten days.
A U.S. defence official confirmed there were no known American casualties, and analysts noted the strike did not target major oil infrastructure.
John Kilduff of Again Capital described Iran’s response as “somewhat measured” and distant from densely populated areas.
“This appears to be a face-saving move by the Iranians. Hopefully, the diplomatic route will be taken,” Kilduff said.
The recent hostilities between Iran and Israel have renewed concerns over the Strait of Hormuz, a vital route for global oil shipments that Iran has frequently used as leverage in times of tension.
Although Tehran has repeatedly threatened to close the strait during past crises, it has never followed through.
Kilduff added, “It’s fairly clear that this won’t immediately affect oil flows in the region, particularly through the Strait of Hormuz.”