Barron’s Markets Editor Ben Levithorn discusses the impact of geopolitical concerns on gold and oil prices on Barron’s Roundtable.
Oil prices are expected to rise when markets open next Monday Iran’s attack on Israel Analysts closely following Israel’s reaction said prices reached a six-month high on Friday before falling over the weekend.
More than 300 drones and missiles were launched from Iran toward Israel, but the Israel Defense Forces, with support from the United States, France, Jordan, and the United Kingdom, defeated most of them. The Israel Defense Forces said only “a small number” of missiles and drones entered Israel and caused “minor damage” to Nevatim Air Base.
The Iranian attack comes weeks after Iran blamed Israel for an attack on the Iranian consulate in Syria that killed the top commander of Iran’s Revolutionary Guards Overseas Quds Force. This is the first time Iran has attacked Israel, despite more than 40 years of hostility between the two countries.
Concerns about Iranian retaliation against Israel pushed oil prices to their highest since October last week, pushing global benchmark Brent crude prices higher. crude oil It reached $92.18 per barrel on Friday, but settled on the day at $90.45 per barrel, a 71 cent increase. U.S. West Texas Intermediate crude oil futures rose 64 cents to $85.66 a barrel.
Biden calls for G7 meeting to counter Iran’s ‘brazen’ attack
Oil prices are expected to rise on Monday following Iran’s attack on Israel, but the extent of the rise could depend on a possible escalation. (Photo by: Jakub Porzycki/NurPhoto via Getty Images / Getty Images)
“It is natural to expect prices to rise once trading resumes,” Tamas Varga of oil broker PVM told Reuters. “That being said, there was nothing Impact on production So far, Iran has said that “this issue can be considered resolved.” ”
“No matter how strong and painful the market’s initial reaction may be, the rally could be short-lived unless there is a significant disruption of supply from the region,” he added.
In a post on X, the White House said the leaders of the Group of Seven condemned the Iranian attack and reaffirmed the G7’s commitment to Israel’s security at a meeting on Sunday regarding the situation. Biden administration Officials said the G7 leaders discussed sanctions against Iran.
World leaders unanimously condemn Iran’s ‘reckless’ attack on Israel: ‘We stand with Israel’
The Israeli Air Force, along with the United States, France, Jordan, and the United Kingdom, countered most of Iran’s drone and missile attacks. (Photo credit: JALAA MAREY/AFP via Getty Images/Getty Images)
“Unless Israel decides to escalate, the key will be whether Iran considers this retaliation a measured and final response,” Brian Jacobsen, chief economist at Annex Wealth Management, told Reuters. Told.
“In 2020, Iran considered a measured and fair response to the US killing of Soleimani. If Iran continues to retaliate rather than escalate, stocks will breathe a sigh of relief, even if oil prices fall. ‘Gold, the dollar and bonds all have risk premiums built in to reflect conflicts,’ Jacobsen added.
Iran’s oil exports, a major source of revenue, have increased significantly under the Biden administration after having been significantly reduced due to measures taken by the Iranian government. trump administration.
How can Israel respond to Iran’s brazen attacks?
Israeli Ambassador to the United Nations Gilad Erdan shows a video of an attack on Israel by Iran during a meeting of the United Nations Security Council at United Nations Headquarters in New York City, April 14, 2024. (Photo by CHARLY TRIBALLEAU/AFP via Getty Images/Getty Images)
The White House insists it is not encouraging Iran to expand exports. enforcement of sanctions. A decline in Iranian exports would lead to further increases in oil prices and U.S. gasoline prices, making it a politically sensitive issue ahead of this fall’s presidential election.
Potential impact on vessels passing through Strait of HormuzThe fact that oil is a difficult issue, accounting for about one-fifth of the world’s total oil consumption, will also be factored into market pricing.
Iran’s Revolutionary Guards naval commander said on Tuesday that Iran could close the strait if it deems it necessary, and earlier on Saturday, Iran’s state news agency IRNA reported that an Revolutionary Guards helicopter crashed into the Portuguese-flagged MSC Aries. They boarded the ship and reported that they were taken to the same strait. Iranian waters.
CLICK HERE TO GET FOX BUSINESS ON THE GO
“Oil prices already include a risk premium, and the extent to which they expand further depends almost exclusively on developments near Iran in the Strait of Hormuz,” said Saxo Bank’s Ole Hansen.
Reuters contributed to this report.
