Iran launched a missile attack against Israel on Tuesday, leading to a rise in U.S. crude oil prices of more than 3%. The attack has raised fears of a potential regional war in the Middle East.
Helima Croft, head of global commodity strategy at RBC Capital Markets, expressed concerns about the situation, noting that there has been complacency surrounding the possibility of a war. The key question now is how Israel will respond to the attack and whether they may target Iran's nuclear facilities or oil infrastructure, as Iran is currently producing oil at a five-year high.
As a result of the missile attack, West Texas Intermediate and Brent crude oil prices both saw increases on Tuesday. The Islamic Revolutionary Guard Corps of Iran fired dozens of missiles at military targets in Israel, according to the state Islamic Republic News Agency.
The Israel Defense Forces were able to intercept many of the missiles, and there were no reported casualties at the time. The IDF is monitoring the situation closely and stated that there are no additional aerial threats from Iran at this time.
Tensions in the Middle East have been escalating, with Israel conducting airstrikes on the Iran-backed militia Hezbollah in recent days. This latest attack by Iran has led to concerns about potential supply disruptions in the oil market, with analysts warning that an Israeli incursion into Lebanon could trigger a regional war with Iran.
Overall, the impact on the oil market will depend on the extent of the damage caused by the attack and Israel's response. Analysts are closely monitoring the situation and assessing the potential risks to crude oil prices.