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Iran’s Attack on Israel Rattles Global Markets: Oil Prices Dip, Gold Edges Higher

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Brent Crude Holds Near $90 as Analysts Assess Impact of Escalating Tensions

In the wake of Iran’s reprisal attack on Israel over the weekend, global markets were sent into a state of flux, with oil prices dipping slightly while gold edged higher amidst heightened uncertainty.

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Brent crude, a pivotal benchmark for international oil prices, experienced a decline in early Asian trade, though it remained proximate to the $90 per barrel mark on Monday morning. 

The attack had been widely anticipated, with Brent crude nearing a six-month high in the preceding week as tensions escalated between the two nations.

Israeli Defence Minister Yoav Gallant underscored the ongoing nature of the confrontation, stating that it was “not over yet,” leaving analysts and traders vigilant for potential further developments. 

Energy analyst Vandana Hari noted the market’s current stance, highlighting that the oil market had not yet incorporated additional supply threats stemming from the conflict.

While Brent crude may see a dip below the $90 threshold, a significant pullback appears unlikely as traders continue to focus on the geopolitical risks posed by conflicts in Gaza and Ukraine, Hari added. 

The response from Israel in the aftermath of the attack is anticipated to be pivotal in shaping global market sentiments in the days and weeks ahead.

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Peter McGuire of trading platform XM.com predicted volatility in the energy market and suggested that oil prices could surge should Israel mount a robust response to Iran’s actions.

The Asia-Pacific share markets mirrored this uncertainty, with indices such as the Hang Seng, Nikkei 225, and Kospi experiencing declines, while China’s Shanghai Stock Exchange Composite saw a modest increase.

Amidst the market turbulence, the price of gold saw a slight uptick, hovering near record highs and trading close to $2,400 per ounce. 

Investors often turn to gold as a safe-haven investment during times of geopolitical instability, with its value surging ahead of the weekend’s events.

Iran’s attack on Israel follows its vow to retaliate for an attack on its consulate in Damascus earlier in April. While Israel has not officially claimed responsibility for the strike, it is widely believed to be the perpetrator.

Last week, Brent crude touched $92.18 per barrel, its highest level since October, before retracting to close at $90.45. 

As the seventh largest oil producer globally and a key member of the OPEC oil cartel, Iran’s actions have raised concerns about potential disruptions to global oil supply routes, particularly through the vital Strait of Hormuz.

The Strait, situated between Oman and Iran, serves as a critical shipping route, facilitating the passage of approximately 20% of the world’s total oil supply. OPEC members, including Saudi Arabia, Iran, the UAE, Kuwait, and Iraq, heavily rely on this route for the majority of their oil exports.

Over the weekend, Iran’s seizure of a commercial ship with ties to Israel as it transited through the Strait of Hormuz further underscored the region’s volatility and the potential implications for global energy markets.

As tensions persist and geopolitical uncertainties loom, market participants remain on edge, closely monitoring developments for any signs of escalation or de-escalation in the conflict between Iran and Israel.

 

This article was created using automation and was thoroughly edited and fact-checked by one of our editorial staff members

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