On Monday's opening, global oil prices fell sharply as the market reacted to Israel's latest airstrike actions. Despite Israel launching a massive airstrike on Iran over the weekend, it did not target Iran's nuclear or energy facilities, which eased investor concerns, causing oil prices to drop in response. According to the latest market data, Brent and WTI crude oil both fell over 4% in early trading, with Brent crude dropping to around $73 per barrel and U.S. WTI crude falling below $69 per barrel.
Spot gold also retreated slightly in early Asian trading on Monday, trading near $2734 per ounce. The market was clearly surprised by Israel's action, as many had expected Israel to attack more strategically significant targets, such as nuclear or oil facilities. However, Israel ultimately chose a more restrained strategy, focusing mainly on Iran's missile manufacturing facilities and drone bases.
Israeli military spokesman Daniel Hagari reported that in the early hours of October 26, the Israeli Air Force used over a hundred aircraft, including F-35s, to carry out three waves of airstrikes on Iranian military targets, lasting about four hours. The first wave targeted Iran's air defense systems, while the subsequent two waves focused on missile and drone bases. However, nuclear or oil facilities were not included as targets in this airstrike.
Since the beginning of this month when Iran launched a missile attack on Israel, the international community has been closely monitoring the development of the situation in the Middle East, fearing the possibility of conflict escalation. Iran's nuclear and energy facilities were previously seen as potential targets for Israeli strikes, but these sensitive facilities were not involved in this strike, alleviating market concerns about escalating tensions.
According to an official Iranian statement, Israeli jets fired long-range missiles at areas such as Tehran and Ilam Province during the attack. Iran claimed that due to the timely response of its air defense systems, the damage was limited, with only some radar facilities hit, but resulting in four soldiers dead. Iran's response to the airstrike was relatively restrained, with the General Staff of the Armed Forces of Iran stating on the 26th that while Iran has the right to respond, the current priority is to promote ceasefires in Gaza and Lebanon.
Analysts pointed out that the sharp drop in oil prices was mainly due to the fading of geopolitical risk premiums. The market previously anticipated that Israel might launch a larger scale retaliatory action, leading to an increase in oil prices. As the direct threat of supply disruption was temporarily removed, market sentiment gradually stabilized. However, experts warned that even if Iran refrains from making a strong response for now, it may retaliate through proxies or other means in the future, warranting continued observation of the long-term direction of the Middle East situation.
