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Oil prices rise after Israel attacks Iran, resulting in a Russian rouble gain

After Israel's major attacks against Iran, the rouble grew against the dollar. This was largely due to a dramatic increase in oil prices, Russia’s main export.

Israel claimed it had destroyed nuclear facilities, missile factories, and killed military commanders as part of a possible long-term operation to stop Tehran from building an atomic bomb.

The attacks led to a retaliatory response from Iran and a concern about possible disruptions in oil supplies.

Brent crude rose 7% to $74.20 per barrel at 1439 GMT. According to LSEG, based on quotes over the counter, the rouble rose 0.4% at 79.70 U.S. dollars.

The trading was low as Russia celebrated a two-day holiday.

The Russian currency appreciated earlier in the day, but oil prices also retraced some of the gains they had made.

The benchmark Russian rouble-based index rose by 0.9% today, led mainly by oil majors. Shares in Rosneft, Tatneft, and Lukoil all increased, respectively, 5.9%, 5%, and 2.7%.

Analysts attribute the rise in the rouble's value against the dollar to the ease of geopolitical tensions, especially with the Trump administration, and the tight monetary policies of the central bank, which have reduced the demand for foreign currencies.

The rouble gained 0.5% on the Moscow Stock Exchange against the Chinese Yuan, which is the most commonly traded foreign currency in Russia. The central bank uses the yuan to make foreign exchange intervention. (Reporting and editing by Mark Trevelyan; Alexander Marrow)

(source: Reuters)