Brent backs off six-month peak as Iran-Israel war concerns subside

International benchmark Brent fell in European trade off six-month highs, trading below $90 a barrel on active profit-taking.

The losses came as concerns about a war between Iran and Israel subsided, with both sides backing off gradually. 

Prices

Brent fell 1.1% to $89.23 a barrel, with a session-high at $90.62, after closing up 0.1% on Friday, approaching a six-month high at $92.14. 

Brent slipped 0.8% last week, the first weekly loss in five weeks on profit-taking. 

Iran-Israel Conflict 

Iran launched over 300 missiles and drones towards Israel over the weekend, the first such direct Iranian attack on Israeli territory, with most of the missiles intercepted. 

The attack was a retaliation against a perceived Israeli airstrike against the Iranian consulate in Syria. 

Despite the size of the Iranian attack, it caused very little damage in Israel, including some damages to an air base in southern Israel, while a 10-year old girl was injured. 

Iran said the military response has been done, while US President Joe Biden informed the Israeli government that the US won’t support an Israeli counterattack on Iran. 

Analysis 

RBC Capital Markets’ analysts believe the war will likely be contained if the Israeli government followed the advice of the US government and avoided an escalation. 

The oil markets will remain on guard to monitor any such developments in the highly torn and war-driven region of the Middle East.