Oil prices unexpectedly fell amid escalation between Iran and Israel

During the energy crisis, traders and trading houses managed to get used to the worst news and negative situations. The geopolitical situation constantly presents surprises and challenges for the industry market, but it is beginning to get used to the shocks.

Iran's expected revenge for the Israeli attack led only to a short-term effect on the stock exchanges and a slight increase in quotations, which began to decline by Monday. Experts are very surprised, since, despite the fact that a major war has not begun, the risk of escalation and the corresponding consequences has not been exhausted. However, oil still unexpectedly becomes cheaper.



On Monday, Brent crude fell back below $90 a barrel, down 1,26% to settle at $89,31. US benchmark West Texas Intermediate (WTI) crude oil traded 1,30% lower at $84,55 a barrel.
Iran's missile attack on Israel prompted a flurry of forecasts for oil prices above $100, although the rise was apparently short-lived.

Since Monday, traders and analysts have been pondering the possibility of another scenario, in which Tel Aviv's potential retaliatory strike against Iran could make up for what Tehran's first-ever large-scale attack failed to do. Whether this will be able to shake up the market, only time and practice will show, but without a tangible cataclysm, prices will clearly creep down; there is nothing to support them at the top. There is not a single factor for “bullish sentiment,” OilPrice experts believe.

However, the market reacted sluggishly even to the seizure of foreign ships by Iranian special forces, as well as to rocket attacks directed through third countries. Analysts already doubt that any factor will be able to turn the situation around. The habituation effect is very undesirable among companies and traders; it does not allow one to hope for stabilization and regulation by external influences rather than internal factors.

Only Russian raw materials are not susceptible to Western volatility - they are consistently shipped and sold above the G7 price ceiling. Due to the embargo and sanctions, the distance from international jurisdictions under the auspices of European and American legislation has a beneficial effect on supplies from the Russian Federation. The situation may change with supply volumes, but not with price.