Oil prices plummeted over 6% on Monday after Israel’s retaliatory strikes against Iran targeted military sites rather than oil or nuclear facilities, alleviating fears of disruptions to energy supplies. Brent crude fell $4.63, or 6.09%, to settle at $71.42 a barrel, while U.S. West Texas Intermediate (WTI) dropped $4.40, or 6.13%, closing at $67.38 a barrel. Both benchmarks opened at their lowest since Oct. 1, reflecting a reduced geopolitical risk premium.
“Obviously, this is a perfect example of a headline-driven market,” noted Phil Flynn, senior analyst at Price Futures Group, emphasizing the market’s sensitivity to developments in the Middle East amid ongoing uncertainty. Last week, oil prices had gained about 4% as traders assessed potential volatility around the U.S. election and Israel’s anticipated response to Iran’s Oct. 1 missile attack.