Oil prices stabilise... for now

There is a sigh of relief in the oil markets, at least for the time being. The ‘limited’ Israeli retaliatory strike against Iran early Friday morning provided the space for Tehran to label the attacks as almost a non-event. The Israeli response was regarded as so weak that Israel’s hawkish national security minister, Itamar Ben Gvir, conceded he wasn’t happy with his country’s response. “Weak”, he said in a one-word post on X (formerly Twitter) in Hebrew, while the Iranian state TV dismissed Friday’s strike, blasting it as “Israeli and American media propaganda”. Following the attacks, oil market prices spiked but then fell. In an almost knee-jerk reaction to the much-anticipated Israeli attack on Iran, oil prices briefly surged Friday morning. However, they dropped quickly, following the Iran state media’s apparent downplaying of the strikes and the realisation that the Israeli retaliation was very limited in scope. This was more of an exercise in public relations to pacify its constituency.