Oil slides over 4% as Israel’s attack on Iran unlikely to disrupt supplies

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Oil slides over 4% as *******’s ******* on Iran unlikely to disrupt supplies

View of Iran’s oil industry installations in Mahshahr, Khuzestan province, southern Iran.

Kaveh Kazemi | Getty Images

Oil prices will remain under pressure for the rest of this year, it may be difficult to see Brent crude oil prices reaching $80 in the foreseeable future.

Andy Lipow

president at Lipow Oil Associates

“The recent ******* military action is unlikely to be seen by the market as leading to an escalation that impacts oil supply,” Citi analysts wrote in a note on Monday, cutting the bank’s Brent oil forecast by $4 to $70 per barrel over the next three months.

Oil markets are also staring at an oversupply. “With ******* deliberately, and perhaps with some ********* encouragement, avoiding the targeting of crude oil facilities, the oil market is back to looking at an oversupplied market,” said Andy Lipow, president at Lipow Oil Associates.

Oil production has been increasing not just in key countries such as U.S., Canada and Brazil, but even among smaller players such as Argentina and Senegal, he added.

“Oil prices will remain under pressure for the rest of this year, it may be difficult to see Brent crude oil prices reaching $80 in the foreseeable future,” Lipow told CNBC via email.

The risk premium has come off a few dollars a barrel as the more limited nature of the strikes, including avoiding oil infrastructure, have raised hopes for a de-escalatory pathway, said Saul Kavonic, an energy analyst at MST Marquee.

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Oil prices year-to-date

The spotlight now will be on whether Iran will counter the ******* in the coming weeks, which would see risk premium rise again, Kavonic told CNBC, noting that the overall trend still ******** one of escalation, with the scope for another round of attacks remaining high.

During a cabinet meeting on Sunday,

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, but maintained that they do not seek war.

“We do not seek war, but we will defend our country and the rights of our people. We will give a proportionate response to the aggression,” he said.

Market attention will turn to ******‑******* and *******‑Hezbollah ceasefire talks that resumed over the weekend, director of mining and energy commodities research at Commonwealth Bank of Australia, Vivek Dhar said.

“Despite *******’s choice of a low‑aggression response to Iran, we have doubts that ******* and Iran’s proxies (i.e. ****** and Hezbollah) are on track for an enduring ceasefire,” Dhar wrote in a note.

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#Oil #slides #Israels #******* #Iran #disrupt #supplies

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