WionDrive News Desk 
Oil prices fell sharply on Monday, with Brent crude dropping by more than USD 4 a barrel following Israel’s recent retaliatory strikes against Iran. The attacks, which targeted missile factories and military sites near Tehran, did not affect oil or nuclear facilities, easing fears of disruptions to energy supplies.
At the market open, both Brent and U.S. West Texas Intermediate (WTI) crude futures hit their lowest levels since early October. By 0915 GMT, Brent was down USD 4.12, or 5.4%, at USD 71.93 per barrel, while WTI fell USD 4.03, or 5.6%, to USD 67.75. The previous week had seen both benchmarks gain approximately 4% as traders assessed the geopolitical landscape and the uncertainty surrounding the U.S. election.
Analysts noted that the geopolitical risk premium previously built into oil prices began to decline after Israel’s limited response. “There can be no doubt that Israel’s response has been heavily influenced by the Biden administration ahead of the U.S. election,” remarked John Evans of oil broker PVM.
Commonwealth Bank of Australia analyst Vivek Dhar expressed skepticism about a swift de-escalation of tensions in the Middle East. “Despite Israel’s choice of a low-aggression response, we doubt that an enduring ceasefire is on the horizon, given the involvement of Iran’s proxies like Hamas and Hezbollah,” he said.
Citi also adjusted its Brent price target for the next three months, lowering it to USD 70 a barrel from USD 74, reflecting a diminished risk premium. Analysts highlighted the importance of upcoming rhetoric from OPEC+ ministers regarding oil production quotas, suggesting that a postponement of planned increases may occur due to a weak fundamental outlook.
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies maintained their oil output policy last month, with plans to start increasing production from December. A full OPEC+ meeting is scheduled for December 1, where further decisions on production will be made.
