why does opec want to stabilize the oil prices?

Why does opec want to stabilize the oil prices? – There is a sigh of relief in the oil markets, at least for the time being. The ‘limited’ Israeli retaliatory strike against Iran early Friday morning provided the space for Tehran to label the attacks as almost a non-event.

The Israeli response was regarded as so weak that Israel’s hawkish national security minister, Itamar Ben Gvir, conceded he wasn’t happy with his country’s response. “Weak”, he said in a one-word post on X (formerly Twitter) in Hebrew, while the Iranian state TV dismissed Friday’s strike, blasting it as “Israeli and American media propaganda”. Following the attacks, oil market prices spiked but then fell.

Why does opec want to stabilize the oil prices?

In an almost knee-jerk reaction to the much-anticipated Israeli attack on Iran, oil prices briefly surged Friday morning. However, they dropped quickly, following the Iran state media’s apparent downplaying of the strikes and the realisation that the Israeli retaliation was very limited in scope. This was more of an exercise in public relations to pacify its constituency.

And, although oil market prices settled slightly higher on Friday, that was still a weekly decline. Brent futures settled up 18 cents, or 0.21 per cent, at $87.29 a barrel. The front-month US West Texas Intermediate (WTI) crude contract for May ended 41 cents higher, or 0.5pc, to $83.14 a barrel.

In an election year, the Biden administration cannot afford elevated gas prices, hence there has been growing diplomatic pressure on Israel and Iran to de-escalate

The more active June contract closed 12 cents higher at $82.22 a barrel.

Both benchmarks had spiked more than $3 a barrel earlier in the session on Friday after explosions were heard in the Iranian city of Isfahan in what sources in the US and elsewhere were describing as an Israeli attack.

However, the gains were capped after Tehran not only played down the strikes almost as a non-incident but also underlined that it did not plan to retaliate.

In the end, it turned out to be nothing “but a big show, and so the markets deflated as quickly as they spiked”, Tim Snyder, an economist at Matador Economics, was quoted as saying.

Almost the same act was played a week earlier when Iran had fired a barrage of missiles at Israel. On April 12, with the weekend approaching, everyone knew then, too, that an Iranian attack on Israeli soil was looming over the next 24 to 48 hours. Consequent to the intelligence warnings and media reports of the coming Iranian direct attack on Israel, oil prices spiked on Friday, April 12.

But the Iranian attack on April 13 was also regarded by most as ‘measured and calculated’. It lasted a mere few ‘tense’ hours and was calculated and ‘measured’, with enough warning. The attacks were not designed to bring about large-scale damages, destruction and fatalities in Israel, analysts underlined. It was more to follow up on its words of responding to Israel’s April 1 attack on the Iranian consulate in Damascus at ‘a time and place of its choice.