Oil prices have seen their steepest drop in a month following reports that Benjamin Netanyahu assured Joe Biden he would not target Iran’s oil or nuclear facilities in response to a missile attack earlier this month.
Brent crude fell 3.6%, approaching $74 a barrel, after The Washington Post reported that the Israeli Prime Minister had committed to focusing on Iran’s military rather than its oil and nuclear sectors.
U.S.-produced West Texas Intermediate also dropped 3.7%, nearing $71 a barrel.
The sell-off was compounded by concerns over China’s economic outlook, as Beijing failed to announce any new stimulus during a weekend briefing.
Kathleen Brooks, research director at XTB, commented: “Oil prices have been volatile in recent weeks, influenced by the ongoing Middle East crisis. The latest reports indicate that Israel will not directly target Iran, removing some of the geopolitical risk premium from oil prices.”
She added that this could impact FTSE 100 oil companies later today, potentially extending the energy sector’s decline, which was one of the weakest performers on Monday.
