Recent strikes by Iran on a U.S. military base in Qatar prompted an immediate reaction from the oil market, with prices falling instead of rising.
Initial Strikes and Market Reaction
Oil traders reacted immediately to Iran's strikes on the U.S. base in Qatar by selling off crude oil. Just three hours before the attack, Donald Trump urged traders to stay calm and lower prices. Following the first missile strike, Brent crude fell by 3%, and by the end of the evening, it reached $71.48, marking the steepest drop in nearly three years.
Traders Used Open-Source Intelligence for Analysis
Oil traders closely monitored news via Twitter and open-source intelligence. Analysts noted that Al Udeid base appeared empty days prior to the strike, reinforcing their assumptions about its symbolic nature. "It's all orchestrated, we know the base is empty," analyst Jorge Montepeque stated.
Market Expectations Regarding Oil Shortage
During the conflict, traders did not anticipate an oil shortage. Despite geopolitical tensions, Iran was ramping up oil production, preventing panic in the market. As one executive put it, "this is not a situation like Ukraine and Russia where trade flows need to be reoriented for a long time."
Ultimately, markets demonstrated resilience to geopolitical shocks, and despite warnings, traders continued selling, leading to prices dropping below pre-conflict levels.
