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The Telegraph
The Telegraph
4 Oct 2024
Ambrose Evans-Pritchard


Iran cannot set off a global oil crisis without hurting its biggest ally

Oil is the dog that has not barked since the Middle East blew up. If Iran had launched a full-blown missile strike at Israel at any earlier time in the last half century, the price of crude would be spiralling into the danger zone.

This strange calm may be because the world has yet to grasp the enormity of what is happening. Markets traded contentedly all through July 1914 after the Sarajevo assassination, sceptical because Europe’s great powers had gone to the brink so many times before and each occasion proved a false alarm. It was only after Austria’s ultimatum to Serbia that they began to discern an unstoppable chain-reaction.

Nevertheless, it is remarkable that crude is still trading close to a three-year low days after Israel decapitated the leadership of Hezbollah, prompting Iran’s Revolutionary Guards to sweep aside the more dovish Pezeshkian government and set off what is a regional conflagration. 

Brent futures have only nudged up and cannot seem to break through $78 (£59.46) a barrel. Saudi Arabia has even warned over recent days that prices could drop to $50. This compares to $120 in mid-2022 after Russia’s invasion of Ukraine or $148 in mid-2008 at the peak of the China boom – roughly $216 in today’s money.