## Oil Prices Plunge Over 4% After Israeli Strikes on Iran
The global oil market experienced a significant downturn on Monday, with prices dropping over 4% following Israeli military strikes on Iranian sites over the weekend. While local media reported the strikes as “limited,” the event has sent shockwaves through the energy sector, raising concerns about potential disruptions to oil supplies.
The Israeli strikes, carried out on Saturday, were a response to a ballistic missile attack by Iran on October 1. Iranian news agency Tasnim reported four soldiers were killed and “limited damages” were sustained, with oil, nuclear, and civilian infrastructure spared. However, the attacks triggered immediate sell-offs in the oil market.
Several oil exchange-traded funds (ETFs) saw substantial losses in pre-market trading on Monday. Notable declines included ProShares Ultra Bloomberg Crude Oil UCO (down 8.41%), United States Oil Fund LP USO (down 4.69%), SPDR S&P Oil & Gas Exploration & Production ETF XOP (down 1.81%), and MicroSectorsTM Oil & Gas Exploration & Production 3X Leveraged ETNs OILU (down 4.54%).
Despite the tensions, Iran’s oil industry continues to operate as usual. While Iran supplies up to 4% of the global oil market according to the U.S. Energy Information Administration, any disruption to its production could have a significant impact on energy prices.
This latest escalation adds to the existing geopolitical tensions that have kept energy markets on edge. Earlier this month, oil prices had already dipped by 2% after OPEC lowered its global oil demand growth forecast for the third consecutive month, citing actual consumption data and reduced demand expectations.
Experts had previously warned that an Israeli attack on Iranian oil facilities could significantly disrupt global oil prices. John Driscoll, chief strategist at JTD Energy Services, highlighted the potential for such actions to unsettle the market, drawing parallels to past incidents like the 2019 drone attacks on Saudi oil fields.
While Iran’s oil production is currently lower due to existing sanctions, any disruption could still lead to a significant price increase. The situation remains fluid, and the global energy market is closely watching for any further developments that could impact oil supplies and prices.
