Iran has not closed the Strait of Hormuz, and oil prices have plummeted over 7%, marking the largest single-day drop in nearly three years

According to Zhitong Finance APP, on Monday, international oil prices fell sharply, with both Brent crude oil and U.S. WTI crude oil futures plunging over 7%, with prices dropping more than $5 per barrel, marking the largest single-day decline since August 2022. The market was initially concerned that Iran would block the Strait of Hormuz due to U.S. military airstrikes on its nuclear facilities, but Iran instead targeted U.S. military bases in Qatar, avoiding key oil and gas transport routes, which alleviated market fears of a disruption in Middle Eastern crude oil supply. By the close of trading that day, Brent crude oil futures fell by $5.53, a decrease of 7.2%, settling at $71.48 per barrel; U.S. West Texas Intermediate (WTI) also dropped by $5.53, a decline of 7.2%, closing at $68.51. In after-hours trading, the two major crude oil benchmarks briefly expanded their losses to nearly 9%. The trading range for Brent futures that day reached as high as $10, the largest volatility since July 2022. Earlier in the Asian morning session, Brent had risen nearly 6% due to market concerns that Iran's retaliatory actions could cut off about one-fifth of the world's crude oil supply passing through the Strait of Hormuz. However, as the attack clearly targeted military bases and did not result in U.S. military casualties, market risk expectations quickly cooled. After suffering U.S. airstrikes on its main nuclear facilities, Iran launched missiles at the Al Udeid Air Base in Qatar on Monday in retaliation. This base is the largest U.S. military facility in the Middle East. According to two U.S. officials, the attack did not result in any casualties. Market participants pointed out that Iran's actions may be intentionally "restrained," targeting military bases while avoiding attacks on oil and gas infrastructure, potentially creating space for de-escalation. Energy market consulting firm Energy Aspects stated that Iran's choice to attack a well-defended base without causing casualties may signal a desire to avoid a full-scale conflict. John Kilduff, a partner at Again Capital, stated: "At this point, Iran's main goal does not appear to be disrupting oil transport, but rather to carry out military retaliation against U.S. bases or to target more Israeli civilian targets." As the third-largest crude oil producer in the Organization of the Petroleum Exporting Countries (OPEC), Iran has consistently threatened to block the Strait of Hormuz if its security is compromised. However, this action chose to avoid that maritime area, meaning oil transport has not yet been affected. According to informed sources, after the Iranian attack, the oil and liquefied natural gas (LNG) transportation and production of Qatar's national energy company remained unaffected, and the U.S. military did not find any other overseas bases attacked. Nevertheless, the tense geopolitical situation has led some vessels to adjust their routes. According to ship tracking data, at least two supertankers turned around near the Strait of Hormuz, and some vessels chose to speed up or pause their journeys to avoid risks. Additionally, Iraq's state-owned Basra Oil Company reported that several international oil giants, including BP, TotalEnergies, and Eni Spa, have evacuated some employees working in Iraqi oil fields. Andy Lipow, president of Lipow Oil Associates, who has long focused on energy geopolitics, stated: "We have seen similar situations before, with frequent geopolitical tensions in the Middle East, but it has never truly led to the closure of the Strait of Hormuz." U.S. President Donald Trump posted on the social platform Truth Social, calling for the Department of Energy to increase domestic oil production and encouraging "to start drilling now" to hedge against potential surges in oil prices due to tensions in the Middle East. He emphasized the desire to maintain lower oil prices. Investors are reassessing the "geopolitical risk premium" in oil prices. HSBC stated in a report that if the risk of the Strait of Hormuz being closed increases, Brent crude oil prices could briefly surge above $80 per barrel, but if the disruption risks do not materialize, oil prices will fall back