The search for balance in oil

Oil has drawn attention after Iran’s attack on Israel, where prices fell on speculation the conflict would be contained. Brent crude initially rose just 0.7 percent to $91.05 a barrel before falling to $90. Iran struck Israel from its own territory for the first time over the weekend, firing more than 300 missiles and drones, but most were intercepted. The attack, which had been anticipated for days, came in retaliation for an attack in Syria that killed Iranian officers. “This war could escalate down the escalation ladder if the Israeli government follows the White House’s advice and forgoes retaliatory actions,” analysts including Helima Croft at RBC Capital Markets LLC said in a note. They said Iran’s action was “far more extensive than previous retaliations, but it still had advance notice.” Oil has been one of the strongest performers in commodities this year as OPEC+ tightens supply to drain stocks and support prices. The latest attack ratchets up tensions in a region that produces about a third of the world’s crude. Still, Iran’s mission to the United Nations has downplayed the risk of a wider conflict for now, saying the issue “can be considered concluded.” “The situation is fluid and if Israel signals it will not retaliate, market tensions will ease,” said Arne Lohmann Rasmussen, head of research at A/S Global Risk Management. “The most fearful scenario is the closure of the Strait of Hormuz. I don’t think Iran will close the strait, but the risks are increasing,” he added.