Oil Plunges 6% Despite Iran’s Attack on U.S. Base in Qatar

In a surprising move, crude oil futures are down by over 6% following Iran’s attack on the Al Udeid Air Base in Qatar, which has a significant U.S. military presence. Oil prices have surged since Israel first struck Iran’s nuclear sites given that the Middle East plays a massive role in the global oil supply chain. So, why are oil prices dropping instead of rising?

Underneath the surface, the attack may be more symbolic than aggressive. Sources told Axios that Iran informed Qatar of the attack before it actually took place. In addition, the Trump administration was also in the know.

Strait of Hormuz Left Untouched as Iran Attack Results in Zero Casualties

Iran’s attack resulted in zero casualties and did not affect any oil infrastructure sites, while the Strait of Hormuz, a global passageway for oil, continues to flow with no disruptions.

“The base that was targeted in the attack by the powerful Iranian forces was far from urban facilities and residential areas in Qatar,” said Iran’s Supreme National Security Council.

Another indicator that the Israel-Iran war is easing and could soon come to an end is the market’s response. The S&P 500 (SPX) is well in the green, recovering from an initial drop following the attack.