Oil fell after Israel’s October 2024 retaliation against Iran because the strike avoided Iranian oil facilities and did not disrupt energy supplies, easing fears that conflict would remove barrels from the market. That unwound some of the risk premium added after Iran’s October 1 missile attack. Weak demand concerns and ample expected supply also weighed on prices; the fall did not mean the conflict or its risks had ended.
Which strike preceded the oil-price drop?
The events were linked but distinct. Iran fired missiles at Israel on October 1, 2024. Markets then watched for the scope of Israel’s response, including whether it might target Iranian energy infrastructure or disrupt regional flows. The sharp fall in oil discussed in late-October coverage came after Israel retaliated over the October 26–27 weekend—not immediately after Iran’s October 1 attack. The U.S. Energy Information Administration (EIA) described uncertainty about a possible Israeli response as a factor in oil markets that month: EIA, October 2024 Short-Term Energy Outlook.
Why did oil fall after the retaliation?
Oil prices reflect expectations about future supply as well as barrels already being produced. Before Israel’s response, traders had to account for the possibility that an attack could damage oil infrastructure or interrupt supplies. Reuters reported that Israel’s strike bypassed Iran’s oil and nuclear facilities and did not disrupt energy supplies. With that immediate disruption scenario less likely, some of the risk premium built into prices came out: Reuters, October 28, 2024.
This was a change in perceived near-term supply risk, not proof that geopolitical risk had disappeared. The International Energy Agency (IEA) said Brent futures had peaked early in October and that the view that hostilities would remain contained gained ground as the month progressed: IEA, Oil Market Report, October 2024.
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What prices show about the rise and reversal
The October sequence shows how prices first rose while the response was uncertain, then retreated after the strike’s targets became clear. The figures below refer to the stated benchmark and timing; the October 28 quotations are intraday prices, not closing settlements.
| Observation | Price and context |
|---|---|
| October 4 | Brent spot was $79 per barrel, up 11% from a week earlier, according to the EIA’s October 2024 outlook. |
| October 7 | Brent futures peaked at $80.90 per barrel, according to the IEA’s October report. |
| October 28, 0915 GMT | Brent, the international benchmark, was $71.93 per barrel; WTI, the U.S. benchmark, was $67.75 per barrel, according to Reuters. These were intraday quotations. |
| October average | Brent futures averaged $75.38 per barrel for October, according to the IEA; the contract ended the month near its opening level. |
The EIA’s October outlook is available at EIA, the IEA’s monthly assessment at IEA, and Reuters’ October 28 market report at Reuters.
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Why demand and supply fundamentals mattered too
The retreat was not explained by the military headline alone. Lower concern about an immediate disruption returned attention to forces that had already been pressing on crude:
- Demand growth concerns: The EIA said weak global oil demand-growth concerns outweighed inventory declines and OPEC+’s decision to defer planned production increases until December in its account of September’s price declines.
- Ample and potential supply: The Associated Press reported that, as immediate disruption fears eased on October 28, traders again focused on ample supply, slower Chinese growth, and anticipated OPEC+ additions: Associated Press, October 28, 2024.
The IEA also noted seasonal European refinery maintenance and weak refinery margins as pressures on North Sea Dated relative to other benchmarks. That helps explain some benchmark-specific context, but it was not Reuters’ main explanation for the October 28 fall in Brent and WTI.
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The simplest interpretation is a repricing: traders had assigned some chance to damage or disruption that would tighten supply; the reported targets and lack of supply interruption reduced that near-term risk. Meanwhile, demand concerns and the prospect of more supply continued to pull prices lower. The market response was therefore neither a declaration that the conflict was over nor a pure measure of changes in current production.
These are historical market observations from October 2024, not current oil prices or a forecast. Oil can react again if the expected effect on future supply changes.
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