HomeMediaLatest NewsPolitical window dressing: why the cost of oil ignores Israel's strike on Iran

Political window dressing: why the cost of oil ignores Israel's strike on Iran

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department

Alexey Gromov, Principal Director on Energy studies of the Institute for Energy and Finance, commented to Forbes on the weak reaction of world oil prices to the mutual blows exchange between Iran and Israel.

"The market reacts at the moment to the situation," Alexey Gromov explains. — The attack has started, nothing is clear yet, and prices are jumping, but as soon as traders start to figure it out, get information from news feeds, they realize that all this is a political show-off. Thus, the market has very correctly noticed this trend of conditional escalation of the conflict."

A week ago, Gromov recalls, everyone was waiting for an escalation in the Middle East region, but everything was limited to an indicative strike by Iran, and the oil markets reacted very poorly to this.

The market has already adapted to almost all the geopolitical risks that have manifested themselves in the region recently, the expert notes. He recalls that last year there were fears that the price of oil could rise sharply due to attacks by Yemeni Houthis on ships in the Red Sea.

"The attacks have not stopped, there are periodic reports of shelling and seizure of ships, and a reduction in shipping through the Suez Canal, but nevertheless oil prices, which reacted nervously at the very beginning, then calmed down," Alexey Gromov says.

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department
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