Oil Prices Decline as Israel Signals No Target on Iranian Crude

Highlights:

• Oil prices drop: Brent futures fell nearly 3% to around $75, while WTI slipped below $72 following reports that Israel won't target Iran’s crude infrastructure.
• Middle East tensions ease: Israel's focus on military targets, rather than oil facilities, reduces fears of a major supply disruption in the region.
• Demand concerns return: Attention shifts back to slower growth in key markets, particularly China, contributing to the continued decline in crude prices.

Oil prices fell for the third consecutive session amid reports that Israel is unlikely to target Iran’s crude infrastructure, easing fears of a significant supply disruption.

Brent and WTI See Sharp Declines

Brent futures dropped nearly 3% to around $75 per barrel, following a 2% loss on Monday. West Texas Intermediate (WTI) also saw a decline, slipping below $72. Israeli Prime Minister Benjamin Netanyahu reportedly assured the Biden administration that military strikes would focus on Iran’s military rather than its oil or nuclear facilities, as per sources cited by The Washington Post.

Geopolitical Tensions Ease

Tensions in the Middle East, which supplies about a third of global oil, have fueled recent volatility in crude prices. Israel’s retaliation to an October 1 missile attack from Iran had initially raised concerns of widespread supply disruptions. However, the latest developments have reduced geopolitical risk, according to market analysts.

At the time of writing, prices remain under pressure as attention shifts back to demand concerns in major markets like China.

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