Oil prices dropped by over 1% on Tuesday, driven by concerns over global demand and statements from Israeli Prime Minister Benjamin Netanyahu, who assured that Israeli forces would not target Iranian oil facilities.
Brent crude, the international benchmark, fell by 1.2% to $74.55 per barrel by 9:57 a.m. local time (0657 GMT), down from its previous close of $75.43. Similarly, the US benchmark, West Texas Intermediate (WTI), declined by 1.2% to $70.69 per barrel, compared to its previous close of $71.56.
The decline in prices comes after OPEC‘s latest monthly oil market report, which revised its global crude oil demand growth forecast for 2024. The group reduced its estimate by 106,000 barrels per day (bpd) from the previous month, expecting total world oil demand to increase by 1.93 million bpd this year, reaching 104.14 million bpd.
OPEC also lowered its demand growth forecast for 2025 by 100,000 bpd, projecting demand to rise by 1.64 million bpd that year.
Much of the slowdown in demand is attributed to China, the world’s largest oil importer. OPEC expects Chinese demand to increase by 580,000 bpd this year, 70,000 bpd less than it had previously predicted. Analysts worry that weaker demand from China could further dampen global oil consumption.
In addition to demand concerns, reports that Israel is unlikely to strike Iranian oil facilities have eased fears of supply disruptions, further pushing prices down. Netanyahu assured the United States that Israeli forces would focus on Iranian military sites, not oil infrastructure, in line with US President Joe Biden’s warnings.
International media reports suggest that Israel is expected to act against Iran before the US elections on November 5, as delaying further could be seen by Iran as a sign of weakness.
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