According to Reuters, oil prices plunged over 7% on 23 June, with Brent crude settling at $71.48 per barrel and U.S. West Texas Intermediate (WTI) at $68.51, following Iran’s missile attack on a U.S. military base in Qatar.
The market reacted to confirmation that the attack did not target or disrupt vital oil traffic through the Strait of Hormuz, a key global oil transit chokepoint. Brent’s drop was its steepest since August 2022, reflecting easing fears of immediate supply threats despite the escalation in regional tensions, Reuters reports.
The missile strike came after the U.S. bombed Iranian nuclear sites, prompting fears of broader conflict. However, since there were no casualties or further strikes on U.S. bases beyond Qatar, and no interruptions to energy exports from key producers like Qatar or Iraq, oil markets began pricing out the worst-case scenario. Analysts note that unless tensions escalate further or oil shipments are directly threatened, geopolitical premiums may diminish.
While a few tankers temporarily altered course near the Strait of Hormuz, there has been no actual closure or blockade. Oil companies including BP and TotalEnergies have partially evacuated staff from Iraqi fields as a precaution.
Meanwhile, former President Trump called for increased U.S. production to keep prices low, and HSBC noted that Brent could spike above $80 if disruption fears intensify, but expects prices to retreat if those fears remain unrealized, Reuters concludes.
