Location: Washington/Tehran/Doha | Date: June 24, 2025
Following US airstrikes on Iran’s nuclear infrastructure, Iran retaliated on Monday evening by launching missiles at a US military base in Qatar. Despite rising tensions in West Asia due to the ongoing Iran-Israel conflict and American involvement, global oil prices dropped instead of spiking—an outcome that initially seemed counterintuitive.
However, oil traders interpreted Iran’s actions not as full-scale escalation but rather as symbolic retaliation. The absence of any move to block the Strait of Hormuz, a key chokepoint through which nearly one-fifth of the world’s oil supply flows, was taken as a clear sign that Iran did not intend to disrupt oil shipments.
This move reassured markets. Traders concluded that Tehran was looking to de-escalate rather than prolong or expand the conflict. The assessment proved accurate, as later that night US President Donald Trump announced a ceasefire between Israel and Iran. Although no formal agreement has been acknowledged, both sides signaled a pause in hostilities.
Iran’s Foreign Minister Seyed Abbas Araghchi confirmed that there was no official ceasefire agreement, but if Israel ceased attacks, Iran would not continue retaliating.
Following these developments, oil prices tumbled further. Brent crude fell to around $68 per barrel, wiping out gains made over the past two weeks when the conflict had pushed prices as high as $81 per barrel. War risk premiums on oil shipping had soared due to fears of attacks on tankers, but those concerns quickly faded with signs of diplomatic cooling.
In the end, Iran’s decision to avoid direct disruption of oil flows helped stabilize the global market, even as geopolitical tensions remain simmering.