The global oil market reacted modestly to U.S. airstrikes on Iran’s nuclear facilities over the weekend, with prices rising only briefly before stabilizing. Brent crude jumped around 5% in overnight trading but quickly receded, reflecting a market surprisingly unfazed by rising geopolitical tensions.
“It’s remarkable to have such a limited risk premium in the face of this uncertainty,” said oil expert Ben Cahill of the University of Texas-Austin. Analysts point to the market’s resilience since October 7, 2023, and even since the 2019 attacks on Saudi Arabia’s Abqaiq oil facility.
Ellen Wald of the Atlantic Council noted that Saudi Arabia’s substantial oil reserves and production flexibility help buffer potential disruptions. She added it would be “incredibly difficult” for Iran to shut down the Strait of Hormuz, a key global oil chokepoint.
While Iran’s parliament endorsed closing the strait, the decision lies with its military leadership. RBC’s Helima Croft cautioned Iran may still use asymmetric tactics to increase economic pressure, even without a full closure.
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