An anti-missile system operates after Iran launched drones and missiles towards Israel, seen from Ashkelon, Israel, April 14, 2024.
Amir Cohen | Reuters
(See a special live broadcast of CNBC’s coverage of the conflict and market impact at 6 p.m. ET Sunday here.)
Crude oil futures were set to open higher on Sunday after Iran launched an air attack on Israel with a barrage of missiles and drones, raising fears that the Middle East is heading toward a regional war that could disrupt oil supplies.
The West Texas Intermediate contract for May delivery hit a high of $87.67 on Friday, while June Brent futures rebounded to $92.18. U.S. crude closed at $85.66 a barrel on Friday, while the global benchmark settled at $90.45. WTI futures started the year around $71 per barrel.
Iran launched more than 300 drones and missiles against military targets in Israel on Saturday in an attack that President Joe Biden called “unprecedented.” The United States has intervened to directly help Israel shoot down almost all incoming munitions, Biden said in a statement Saturday.
The crude oil market is now bracing for the Netanyahu government’s response to the attack and waiting to see if it will mark the start of a direct war between Israel and Iran, according to Jorge Leon, senior vice president of Rystad Energy .
“In a worst-case scenario, forceful retaliation by Israel could trigger a spiral of escalation, potentially leading to an unprecedented regional conflict,” Leon said in a note on Sunday. “Under such circumstances, geopolitical bounties would increase significantly.”
The airstrike was the first time Iran had directly attacked Israeli territory, senior US military officials told reporters on Sunday. The attack was launched from locations in Iran, Iraq, Syria and Yemen, the officials said. More than 100 ballistic missiles have been fired at Israel as well as cruise missiles and land attack drones, a senior administration official said.
The attack was in retaliation for an Israeli strike on the Islamic Republic’s diplomatic facilities in Damascus, Syria, earlier this month that killed seven Iranian military officials, including a top commander.
Although significant in scale, the Iranian attack caused little real damage in Israel. The Nevatim air base in southern Israel suffered minor damage and a 10-year-old girl was seriously injured, according to Israeli army spokesman Daniel Hagari.
Biden told Prime Minister Benjamin Netanyahu that his commitment to Israel’s security was ironclad, but that the United States would not participate in offensive operations against Iran, a senior administration official told NBC News.
U.S. national security spokesman John Kirby told NBC News’ “Meet the Press” on Sunday that Biden does not want a broader deal with Iran. “The hours and days to come will tell us a lot,” Kirby said.
Israeli Foreign Ministry spokesman Lior Haiat said Sunday that “Iran must pay the price for its aggression.” The Islamic Revolutionary Guard Corps must be immediately declared a terrorist organization, Haiat said.
“Against Iran’s massive attack, Israel, like any country, has the right to defend itself, and Israel has defended itself and will continue to defend itself against Iranian aggression,” Haiat said at the conference. press. social media platform “X.”
Iran described the attack as a limited operation in which the Islamic Republic exercised its legitimate right to self-sufficiency after the missile strike on its diplomatic facilities.
“The matter can be considered closed,” the Iranian Foreign Ministry said. mission to the United Nations said the. “However, if the Israeli regime made another mistake, Iran’s response would be considerably harsher.”
The Iranian mission to the UN warned the United States against intervention in the same message: “This is a conflict between Iran and the rogue Israeli regime, which the United States MUST STAY AWAY from.” THE GAP! »
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