What's happened
As tensions escalate between Israel and Iran, oil prices are fluctuating amid fears of supply disruptions. Analysts suggest that while geopolitical risks are rising, the market's response has been muted, with prices remaining below recent highs. The situation is being closely monitored as potential retaliatory actions could affect global oil supply.
Why it matters
What the papers say
According to Politico, the market has shown a muted response to the recent missile attacks, with oil prices remaining below $80 per barrel. Analysts from Business Insider UK highlight that while geopolitical tensions are rising, actual damage to oil infrastructure is necessary for significant price impacts. The Wall Street Journal notes that Saudi Arabia is concerned about falling prices and may increase output if OPEC+ members do not adhere to production limits. This sentiment is echoed by various analysts who suggest that the market is currently complacent about geopolitical risks, as seen in the limited price fluctuations despite escalating tensions.
How we got here
Recent missile attacks from Iran on Israel have heightened geopolitical tensions in the Middle East. This follows Israel's military actions in Lebanon, prompting concerns about potential disruptions to oil supply, particularly from Iranian facilities. The market's reaction has been tempered by increased U.S. oil production and spare capacity from other producers.
More on these topics
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The Organization of the Petroleum Exporting Countries is an intergovernmental organization of 13 nations. Founded on 14 September 1960 in Baghdad by the first five members, it has since 1965 been headquartered in Vienna, Austria.
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Saudi Arabia, officially the Kingdom of Saudi Arabia, is a country in Western Asia constituting the bulk of the Arabian Peninsula.
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.
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Israel, formally known as the State of Israel, is a country in Western Asia, located on the southeastern shore of the Mediterranean Sea and the northern shore of the Red Sea.
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Brent Crude may refer to any or all of the components of the Brent Complex, a physically and financially traded oil market based around the North Sea of Northwest Europe; colloquially, Brent Crude usually refers to the price of the ICE Brent Crude Oil fut
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Iran, also called Persia, and officially the Islamic Republic of Iran, is a country in Western Asia. It is bordered to the northwest by Armenia and Azerbaijan, to the north by the Caspian Sea, to the northeast by Turkmenistan, to the east by Afghanistan a
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Ukraine is a country in Eastern Europe. It is the second-largest European country after Russia, which borders it to the east and northeast.
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Hezbollah is a Shia Islamist political party and militant group based in Lebanon. Hezbollah's paramilitary wing is the Jihad Council, and its political wing is the Loyalty to the Resistance Bloc party in the Lebanese parliament.