Mint Quick Edit | West Asia’s ceasefire: The oil market got lucky
Oil prices eased on the big-relief news of Israel and Iran agreeing to quit warring. Market traders who stayed calm through the warfare may feel justified, but let’s hope their luck doesn’t have a half-life.
Global oil prices hardly budged through the Israel-Iran conflict—not even after the US bombed Iranian nuclear facilities—before the White House announced a ceasefire. Both Tel Aviv and Tehran have accepted a cessation of armed hostilities.
Also Read: Javier Blas: An Israel-Iran war may not rattle the oil market
Although flickery embers of this June’s flare-up reflect the fragility of peace, the global relief is palpable.
Brent crude slipped below its pre-war level of about $70 per barrel as fears eased of an oil-supply squeeze. But a market glut since March isn’t enough to explain the equanimity of oil traders. They may all along have expected other nations not to get drawn in.
To their credit, Iran’s retaliation aimed at a US base in Qatar only seemed performative, with no harm done, allowing the US to shrug it off.
Also Read: Israel-Iran conflict: Echoes of history haunt West Asia
What of the warring duo? Israel had been warning of Iran’s nuclear breakout for over three decades, though evidence of it was always thin. Even if Iran was going for a nuke, it’s unclear if its capacity to do so has been crushed, while its incentive to get one may have risen.
Also Read: Mint Quick Edit | The US blasts in: A forever war in Iran?
Hence, tensions will remain. But since regime change now seems off the US agenda, if not Tel Aviv’s, calm traders might have got this oil scare right. Let’s hope their luck doesn’t have a half-life.
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