Iran Strikes US Military Base, Yet Oil Prices Drop Sharply! Experts Suspect It Was Staged

TradingKey - On Monday, local time, Iran launched an attack on a US Air Force base in Qatar in retaliation for US strikes on its nuclear facilities. Notably, Iran has yet to take any actions to disrupt the transit of oil and gas tankers through the Strait of Hormuz.

Following the incident, President Trump announced that Israel and Iran have fully agreed to a comprehensive ceasefire. As a result, crude oil futures plunged significantly, with WTI and Brent crude extending their losses to nearly 9% by the close, almost erasing all gains made since the Israeli-Iranian conflict erupted.

No Casualties, Energy Transport Uninterrupted

According to Reuters, no US personnel were reported injured in the attack. US military officials disclosed that no Iranian strikes were detected at any US base outside Qatar. 

Energy Aspects stated that unless there are signs of further Iranian retaliation or escalations by Israel or the US, the geopolitical risk premium factored into current oil prices will naturally diminish in the coming days.

Qatar, one of the world's largest exporters of liquefied natural gas, reported no disruptions to the transportation and production activities of its oil giant, QatarEnergy, due to the attack, according to informed sources.

Meanwhile, fearing that Middle East tensions could drive oil prices higher, Trump urged the US Department of Energy via his social media platform, Truth Social, to encourage oil drilling to keep prices low.

John Kilduff, founding partner of Again Capital, noted that while Iran seeks military retaliation against US military bases, oil transport is not the primary target and may remain unaffected. 

Analysts believe that the extent of Iran's retaliatory strike fell short of investor expectations, swiftly alleviating concerns about potential disruptions to Middle East energy supplies.

Harry Tchilinguirian, head of research at brokerage Onyx Capital Group, remarked that the retaliation appeared meticulously staged: Iran struck an unoccupied US base, even providing advance warnings and airspace closure guidance, while steering clear of the Strait of Hormuz.

Currently, oil prices continue to bear the geopolitical risk premium. Previously, markets anticipated a significant surge in oil prices. Goldman Sachs projected that should the Strait of Hormuz face a prolonged blockade, international oil prices could soar beyond $100 per barrel. Citibank indicated that if Iran's export of 1.1 million barrels per day were interrupted, Brent crude prices could skyrocket, potentially reaching $120 to $130 per barrel under extreme circumstances.