Oil Prices Falls By 4% As Iran Targets U.S. Bases

Oil prices dropped sharply by over $3 on Monday, falling nearly 4%, after Iran launched missile strikes on a U.S. military base in Qatar in response to American attacks on its nuclear facilities. The move, however, did not affect the flow of oil and gas tankers through the vital Strait of Hormuz.

By 1:13 p.m. ET (1713 GMT), Brent crude futures were down $2.91, or 3.8%, trading at $74.09 a barrel. U.S. West Texas Intermediate (WTI) crude fell by $2.80, also 3.8%, to $71.06.

Shortly after midday, explosions were heard over Doha, Qatar’s capital, according to a Reuters witness. This followed a Western diplomat’s warning of a credible Iranian threat to the U.S.-operated Al Udeid air base in Qatar.

“Oil flows for now aren’t the primary target and is likely not to be impacted, I think it’s going to be military retaliation on US bases and/or trying to hit more of the Israeli civilian targets,” said John Kilduff, a partner at Again Capital.

Qatar confirmed it had closed its airspace in response to the situation. Flight paths and air traffic control audio also indicated that the UAE shut its airspace, according to Flightradar.

U.S. President Donald Trump stated that he had “obliterated” Iran’s key nuclear facilities during weekend strikes that aligned with an Israeli military offensive. Tehran vowed to defend itself against the joint assault.

In addition, Israel launched fresh attacks on Iran on Monday, including strikes on the capital Tehran and the Fordow nuclear facility, which was also targeted by U.S. forces.

Ship tracking data revealed that at least two supertankers made U-turns near the Strait of Hormuz following the U.S. strikes. Many vessels in the region either altered their routes, paused, or increased speed amid more than a week of regional conflict.

The Strait of Hormuz handles around 20% of the world’s oil supply. Despite recent events, analysts believe a full shutdown of the strait remains unlikely.

According to Energy Aspects, a deliberate strike on a heavily fortified U.S. base could be an opening for de-escalation if it results in no American casualties.
“Unless there are indications of further Iranian retaliation or escalation by Israel/the US then we may see some geopolitical risk premium come out of the price in subsequent days,” the firm said.

Qatar reported no casualties from the attack on the U.S. base.

Iran, the third-largest crude producer in OPEC, declared that the U.S. attacks had broadened the scope of legitimate targets for its armed forces. It also labeled Trump a “gambler” for supporting Israel’s military actions against Tehran.

Amid concerns about rising oil prices due to the conflict, Trump urged for increased domestic production. Posting on Truth Social, he directed the U.S. Department of Energy to “drill, baby, drill” and added, “I mean now.”

Investors remain cautious about how much of a geopolitical risk premium is factored into current prices, as the conflict has not yet disrupted global supply.

HSBC projected Brent crude could temporarily spike above $80 per barrel if risks to the Strait of Hormuz grow, though prices would likely fall again if those threats don’t materialize.

Meanwhile, Iraq’s state-run Basra Oil Company said that major international oil companies—including BP, TotalEnergies, and Eni—had evacuated some personnel from oilfield sites.


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