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Iran‘s Islamic Revolution Guards Corps (IRGC) confirmed that it had launched dozens of missiles and drones against Israel and successfully hit the targets. The attack involving more than 300 missiles and drones was the first on Israel from another country in more than three decades. The Middle East conflict has raised concerns about supply of the oil through the Middle East. The war-like situation is also going to impact Gold rates & Indian rupee.
As Iran is the major oil producer in OPEC countries, it produces over 3 million barrels per day (bpd) of crude oil. Amid the Russia-Ukraine War, Israel-Hamas War, crude oil prices were fluctuating since the last 2 years. Now over the ongoing tention among Israel & Iran, a major oil supply risk there could be more strictly enforced oil sanctions and that Israel’s response could include targeting Iran’s energy infrastructure, ING said in a client note on Monday.
Gold rates went high on 15th April after the Middle East conflict, prompting safe-haven buying of assets such as bullion. Spot gold was up 0.6% at $2,356.69 per ounce, as of 0323 GMT, after hitting an all-time high of $2,431.29 on Friday. U.S. gold futures was steady at $2,373.30.
Tim Waterer, chief market analyst, KCM Trade, said “Gold remains in vogue as a financial asset given the combination of geopolitical risks and the prospects of Fed interest rate easing in the second half of the year. In many respects, gold is taking on the appearance of being an ‘asset for all occasions’ given its ability to rally under varying market dynamics in 2024.”
Oil prices have been rising steadily in recent weeks and after Iran’s attack on Israel to now the question is how much further it could increase? Fears of a wider conflict grew following Iran’s first direct attack on Israel.
Oil prices fell during trade on 15th April, as market participants dialled back risk premiums following Iran’s attack on Israel late on Saturday which the Israeli government said caused limited damage.
Brent futures for June delivery fell 23 cents, or 0.2%, to $90.22 a barrel while West Texas Intermediate (WTI) futures for May delivery declined by 29 cents, or 0.3%, at $85.37 a barrel by 0430 GMT.
As Iran currently produces over 3 million barrels per day (bpd) of crude oil as a major producer within the Organization of the Petroleum Exporting Countries (OPEC), supply risk includes more strictly enforced oil sanctions and that Israel’s response could include targeting Iran’s energy infrastructure, ING said in a client note on Monday.
But if there was significant supply loss, the U.S. could release further crude oil from its strategic petroleum reserves, while OPEC has over 5 million bpd of spare production capacity, it said.
The Indian rupee is expected to be under pressure at open on 15th April 2025, possibly dipping to a new low, on concerns that rising Middle East tensions could push oil prices higher and sour risk appetite.
Non-deliverable forwards indicate the rupee will open at around 83.44-83.48 to the U.S. dollar compared with 83.4150 in the previous session. The rupee’s lifetime low is 83.4550, hit on April 4.
(With Inputs From Reuters)
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