Oil Prices Plummet After Limited Iranian Attack on U.S. Airbase

Within minutes of a small Iranian missile strike on U.S. airbases in Iraq and Qatar, WTI oil prices dove by more than seven percent as traders priced in an apparent "off-ramp" from confrontation with the United States - an off-ramp that could prevent the conflict from disrupting shipping in the Strait of Hormuz. 

The global Brent oil price is tumbling as Iran shoots missiles at Qatar. That seems counterintuitive, but makes total sense. If Iran were serious about retaliation, it'd sink an oil tanker in the Straits of Hormuz. The fact that it isn't doing that means it's bending the knee... pic.twitter.com/bOHfdvY80h

— Robin Brooks (@robin_j_brooks) June 23, 2025

On Monday night (local time), Iran's military launched a total of six missiles at Al Udeid Air Base, the largest U.S. military installation in the Mideast. Iranian diplomats signaled the attack in advance by telling their Qatari counterparts that it was coming, three Iranian officials told the New York Times. This gave the U.S. embassy in Qatar time to issue a shelter-in-place order for all American nationals, and gave Qatari air defenses advance notice to prepare for incoming fire. A barrage of Patriot interceptors destroyed all six Iranian missiles, and no casualties were reported. This was as intended: the attack was designed to fulfill Tehran's need to be seen retaliating for the U.S. strike on its nuclear facilities, while inflicting little damage and leaving the U.S. enough political leeway to take an off-ramp from further escalation, the Iranian officials said.  

Iran claimed a separate missile launch at the U.S.-operated Al-Asad Airbase in Iraq, west of Baghdad. As of Monday night, local media reported no signs of incoming fire. Arabic media outlet Rudaw reported that local Iraqi officials denied that there had been any Iranian attack in the area; U.S. officials have also confirmed that Al-Asad was not attacked. 

Notably, Iran selected two targets that were already well-prepared for retaliatory strikes. Large numbers of warplanes and helicopters were relocated out of Al Udeid and Al-Asad airbases in advance of the U.S. attack on Fordow and other Iranian nuclear sites. Satellite imaging shows that the aprons at both airfields were emptied out last week, though the bases were still inhabited by thousands of U.S. servicemembers.

The one base that was attacked, Al Udeid, was well-defended and no damage to the facility occurred, U.S. officials have confirmed. 

Traffic through Hormuz continues, but flows have changed

Contrary to frequent discussions about a possible Iranian closure of the Strait of Hormuz, marine traffic continues to pass through the waterway unhindered, albeit with changes in activity.

MarineTraffic notes that outbound traffic has increased dramatically since June 14, indicating that owners may be removing tonnage from the Gulf to ensure that it does not get trapped by a closure of the strait. Owners with lower risk appetite or less interest in paying higher war risk premiums may temporarily pause their inbound transits to await further developments, and a small number of tankers have visibly U-turned away from the strait since Sunday. 

Windward reports that after U.S. strikes, inbound traffic through the Strait of Hormuz is down by 28 percent. The consultancy assesses that risk levels to shipping are at the highest they have been in more than 20 years in the strategic waterway. 

Consultancy Vanguard notes that U.S. vessels are in a class of their own because of the conflict. American ships face a high risk of interception and boarding by the Islamic Revolutionary Guard Corps in the Strait of Hormuz - and perhaps even elsewhere in the Mideast. Vanguard recommends a constant 360-degree visual and radar watch for inbound threats, focused on airborne drones and unmanned surface vessels. Routing as far as possible from Iranian and Yemeni shores is recommended.