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NEW YORK: Oil prices sank by about $1 a barrel on Monday after Iran’s weekend attack on Israel proved to be less damaging than anticipated, easing concerns of a quickly intensifying conflict that could displace crude barrels.

Brent futures for June delivery fell $1.15, or about 1.3%, to $89.30 a barrel by 11:23 a.m. EDT (1523 GMT) while West Texas Intermediate (WTI) futures for May delivery were down $1.11 a barrel, or about 1.3%, at $84.55.

Oil benchmarks had risen on Friday in anticipation of Iran’s retaliatory assault, with prices soaring to their highest since October.

Iran’s attack involved more than 300 missiles and drones, and was the first on Israel by another country in more than three decades, raising fears of a broader regional conflict affecting oil traffic through the Middle East.

Oil seen opening up after Iran’s attack on Israel, but further gains may depend on response

Iran saying it considers its retaliation to be over has lowered the geopolitical temperature, said Kpler analyst Viktor Katona, while John Evans at oil broker PVM said the Iranian drone and missile attack was “about as telegraphed a world event that people can remember”.

“They might as well have had big disco lights on them and towed banners with ‘come on, ladies and gentlemen, please shoot me down’.”

The attack, which Iran called retaliation for an air strike on its Damascus consulate, caused only modest damage, with missiles shot down by Israel’s Iron Dome defence system.

“Once again, no oil supply was disrupted and until such a development is forthcoming, maintaining this month’s elevated pricing could prove difficult,” said Jim Ritterbusch of Ritterbusch and associates.

Iran produces more than 3 million barrels per day of crude oil as a major producer within the Organization of the Petroleum Exporting Countries (OPEC).

Middle East hostilities centred on the Israel-Hamas conflict in Gaza have had little tangible impact on oil supply so far.

“If the crisis does not escalate to a point that creates supply disruptions, then there will be downside risk over time, but only once it becomes clear Israel has chosen a measured response,” said Amrita Sen, founder and director of research at Energy Aspects.

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