Oil prices are falling amid Israel's announcement of a restrained response to Iran's attack

Oil prices fell sharply on Asian markets on Tuesday, losing almost 4%, after media reports that Israel is ready to launch retaliatory strikes against Iranian military facilities, not nuclear or oil ones.

Brent crude futures fell to $73.50 per barrel, and contracts for American WTI lost 3.75%, reaching $69.90 per barrel.

On Monday, both benchmarks had already fallen by about 2%, thereby almost compensating for the cumulative increase that was achieved in the seven sessions prior to last Friday. At that time, investors were concerned about the risks to supplies due to Israel's planned retaliatory actions against a missile attack from Iran.

Experts note that the easing of geopolitical tensions has led to a decrease in the «geopolitical premium» for oil. However, according to analysts, the geopolitical situation still supports prices at current levels.

Meanwhile, OPEC on Monday lowered its forecast for global oil demand growth in 2024, with China accounting for the bulk of the decline. Demand in China is expected to grow by 580 thousand b/d compared to the previous estimate of 650 thousand b/d. OPEC also lowered its forecast for global oil demand growth next year to 1.64 million b/d from 1.74 million b/d.