The war in the Middle East does not impact the price as feared
Iran’s attack on October 1 sent Brent higher, but Israel’s response this weekend was specific to military and non-oil targets, which supported the price.
Israel’s attack on Iran was a fact that all analysts assured would happen without a doubt. This is what Israel had warned and that is a country that does not make announcements of this type if its rulers are really not sure of keeping their word. Credibility is one of your most powerful weapons of persuasion in the most unstable area of the world.
What no one knew and everyone was waiting attentively was when, where and what objectives Israel would have.
The Israeli operation, in response to the Iranian attack on October 1, finally took place and in addition to the obvious horror of any war with its loss of life, what everyone feared was that there would be an oil boom, which would affect everyone. the countries of the world, even Uruguay so far from the conflict.
Israel’s response was given on Saturday the 26th. Unlike Iran’s war actions, which fire missiles at any point in the country, without caring about the civilian population, the Israeli aviation focused on military targets and bases, destroying defense systems. air, so the message is clear: we can attack them again and they will not have the capacity to respond.
The Israeli incursion was punctual, and while it lasted it generated a global shock that in the case of oil was quickly recomposed and the fear of an excessive rise was moderated: to the relief of the markets it seems to be stabilized within “normal” margins.
In the last month, the barrel of Brent had a maximum exceeding US$ 80, with the first week of the month pushed up by the tensions in the Middle East, the rise was from US$ 71 to US$ 81. In the middle of the month it entered in a more moderate and distant range of 80, to close this Monday at US$71, as seen in the following graph from Investing.com.
On Monday the 28th, Iran assured that it will not remain passive and will use all the means at its disposal to respond to Israel: “We will use all the means at our disposal to give a decisive response,” said Ismail Baghaei, spokesman for the Iranian Foreign Ministry, as reported. PressTV.
At the same time, he acknowledged that conversations are taking place in the region in which the United States also intervenes, which suggests that there has been no decision to attack. “Diplomacy and the battlefield are complementary,” Baghaei said.
What will happen to oil? It is unlikely that Iran’s military response will occur before the end of the month, so surprises cannot be expected until after November begins.
At the local level, we must hope that the next report from the Energy and Water Services Regulatory Unit (Ursea) is moderate enough not to suggest a significant increase and that fuel prices remain unchanged for another month.
