Crude oil futures have declined following Israeli airstrikes that did not target critical Iranian oil infrastructure.
West Texas Intermediate (WTI) crude has fallen 4.6% to US$68.48 a barrel, while Brent crude, the global benchmark, has fallen 4.4% to US$72.67 a barrel.
The market had been on edge amid concerns that the Israeli response to an October 1 missile barrage from Iran would strike crucial energy facilities, potentially disrupting supply and escalating tensions. However, Saturday's Israeli attacks focused on Iranian air-defence systems and military sites, easing fears of a broader conflict.
"The attack by Israel avoided hitting energy infrastructure and was limited in scope. The limited attack is likely to calm the fears of a direct conflict with Iran," noted Jay Hatfield, CEO of Infrastructure Capital Advisors. He added that he expects oil prices to stabilise between US$75 and US$95 per barrel as the winter season approaches.
Despite the immediate drop in prices, concerns about potential future disruptions remain.
