Crude oil futures fell for a second day Tuesday as the U.S. expects a limited response from Israel to an unprecedented air assault by Iran, reducing fears that the Middle East is on the verge of a broader regional war.
The West Texas Intermediate contract for May delivery lost 31 cents, or 0.36%, to $85.10 a barrel. The June Brent futures contract fell 26 cents, or 0.29%, to $89.84 a barrel.
Four U.S. officials told NBC News they expect an Israeli response to Iran’s attack to be limited in scope and most likely to involve strikes on Iranian forces and their proxies outside Iran.
“Tensions are high, and either party’s next moves are hard to predict, but all the significant signs point toward an easing of hostilities and restraint in the short term,” said Jorge Leon, senior vice president at Rystad Energy, a consulting firm.
Israel’s War Cabinet met for several hours Monday to weigh how Israel should response. An Israeli official told NBC News after the meeting that a response may be “imminent.”
Israeli army chief Herzi Halevi said that “Iran will face consequences for its actions” in a video statement in which he thanked the U.S., Britain and France for assisting Israel in shooting down the more 300 missiles and drones launched at the country.
“We will choose our response accordingly,” Halevi said. “The IDF remains ready to counter any threats from Iran and its terror proxies as we continue our mission to defend the state of Israel.”
The leaders of Britain, France and Germany have called on Israel to show restraint in the wake of the Iranian attack. President Joe Biden told Prime Minister Benjamin Netanyahu over the weekend that the U.S. commitment to Israel is ironclad but Washington will not participate in an offensive operation against Iran, a senior administration official told NBC News.
U.S. Secretary of State Antony Blinken has consulted with Egypt, Jordan, Turkey, Saudi Arabia, Germany and the U.K. since the Iranian attack, State Department Spokesman Matthew Miller told reporters Monday.
“We continue to make clear to everyone that we talked to that we want to see de-escalation, that we don’t want to see this conflict further escalated. We don’t want to see a wider regional war,” Miller said.
The spokesman for the Iranian Armed Forces said the Islamic Republic does not seek to expand the war, but warned Tehran would respond stronger than before if Israel counterattacks, according to a post on the Islamic Republic’s Arabic-language social media page.