There was something almost absurdist on the attention given this weekend to Israel’s peace talks with Saudi Arabia, and whether they would continue in light of the surprise attack from Gaza that has left hundreds dead, scores captured and thousands injured.
The Wall Street Journal reported Iran was involved in directly planning the attacks, which raises the prospect that the U.S. could increase enforcement of sanctions on its exports. Analysts at Goldman Sachs say the de-escalating trend in regional tensions before the weekend attacks had been an important factor behind the rise in Iranian oil production, by nearly a half million barrels per day over the last year.
Pointing to another extreme, Marko Papic, the chief strategist at Clocktower Group, shared this chart showing oil price changes around major Israeli-Palestinian conflicts this century. The takeaway is that they often do not matter. “I am open minded that this can change, but thus far ‘what happens in the Levant, stays in the Levant’ has been a reality,” he said.
The markets The knee-jerk reaction — a plunge in Israeli stocks, a rise in crude-oil prices CL00, +3.91%, a gain in Treasury futures TY00, +0.39% , an increase in gold GC00, +1.01%, and a decline in stock-market futures ES00, -0.55% NQ00, -0.73%. But already, oil has moved off its highest levels. Defense contractors including RTX RTX, +0.56% and Lockheed Martin LMT, +0.85% rallied in premarket trade.