A decision by Israel not to strike Iran’s nuclear and oil sites triggered losses in the international crude oil market with Brent crude oil shedding $3.21, or 4.14 percent to $74.25 a barrel.
US West Texas Intermediate crude oil also lost $3.25, or 4.4 percent to close at $70.58 a barrel.
Mr Benjamin Netanyahu, Prime Minister of Israel told the US that Israel was willing to strike Iranian military targets and not nuclear or oil targets.
Last week, US President Joe Biden warned that an all-out war could break out if Israel under the leadership of Netanyahu does not limit its possible attack to Iran’s military units.
Sources familiar with the situation have said Israel has agreed to contain retaliation and leave out Iranian oil and nuclear facilities.
Other sources have said Israel’s strong man, Mr Netanyahu had said he favours attacks on the Islamic Republic’s military infrastructure in return for Iran’s October 1st ballistic missile attack on Israel.
Global oil demand will rise by 860,000 barrels per day this year, down 40,000 barrels per day (bpd) from the previous forecast, the International Energy Agency (IEA) said on Tuesday.
For 2025, it sees an expansion of 1 million bpd, about 50,000 bpd higher than expected last month.
China has for years driven global rises in oil consumption.
The Paris-based agency now expects Chinese demand to grow by 150,000 bpd in 2024, down 30,000 bpd from the previous forecast. Consumption dropped by 500,000 bpd in August compared to the same period last year.
Investors King reported that OPEC also reduced its forecast for 2024 global demand growth on Monday, but it is still projecting a much stronger expansion of 1.93 million bpd driven in part by a bigger contribution from China.
Market analysts also noted that OPEC and its allies, known as OPEC+, may change production plans for late this year. This may boost prices.
