Oil prices surge after Israel strikes Iran: Oil prices surged close to 9% on Friday, reaching multi-month highs, as escalating Israel-Iran tensions rattled global markets and raised fresh fears of supply disruptions from the oil-rich Middle East. The dramatic spike came after Israel launched coordinated strikes on Iranian nuclear and military targets, triggering immediate retaliation from Tehran. The world is now watching closely as the situation threatens to destabilize key oil routes, including the critical Strait of Hormuz.
Brent and WTI Crude Hit Highest Levels Since January
As of 1019 GMT on Friday, Brent crude futures were up $6.19, or 8.9% to $75.55 a barrel, reaching an intraday peak of $78.50—its highest since January 27. Similarly, U.S. West Texas Intermediate (WTI) crude jumped $6.22, or 9.1%, to $74.26, having earlier touched $77.62, the highest since January 21. This marked the largest one-day gain in crude prices since Russia’s invasion of Ukraine in 2022.
Oil prices surge after Israel strikes Iran, has now become a central concern for global markets, energy analysts, and policymakers alike.
What Triggered the Surge?
On Friday morning, Israel announced it had carried out multiple strikes targeting Iran’s nuclear facility in Natanz, along with ballistic missile factories and military command sites. These actions are being framed by Tel Aviv as a preemptive move to block Iran’s alleged nuclear ambitions. In response, Iran vowed retaliation, launching drones and signaling its readiness to escalate the conflict.
Although there has been no reported impact on oil flows yet, markets are bracing for potential disruptions. Analysts warn that any further escalation could threaten the Strait of Hormuz, a vital chokepoint through which nearly 20% of the world’s oil supply travels daily.
Will the Oil Rally Continue?
According to SEB analyst Ole Hvalbye, the Strait of Hormuz remains operational for now, but volatility in the region is cause for concern. “The key question now is whether this oil rally will last longer than the weekend or a week,” said Janiv Shah of Rystad Energy. “Our signal is that there’s a lower probability of a full-blown war, but the risk premium has already been priced in.”
JPMorgan analysts offered a sobering perspective, noting that while their base case forecast keeps oil in the $60s through 2025, a worst-case scenario involving the closure of the Strait of Hormuz could catapult prices to $120-$130 per barrel.
Trump, OPEC, and the Global Fallout
Former U.S. President Donald Trump has called on Iran to negotiate a deal and prevent further escalation. Meanwhile, OPEC+ is being looked to as a potential stabilizer, thanks to its spare capacity. However, rising energy costs could weigh heavily on already strained economies, especially Germany, which has seen stagnant growth for two consecutive years.
Safe Havens Rise, Stock Markets Tumble
As energy markets surged, global stock indices slumped, and investors rushed to safe havens like gold and the Swiss franc. The uncertainty surrounding Iran’s next move, the involvement of the U.S., and the potential for a regional war are all contributing to market jitters.
Strait of Hormuz: A Potential Flashpoint
With nearly 18 to 19 million barrels per day of oil passing through the Strait of Hormuz, any military action that impacts this corridor could have catastrophic global consequences. Iran has previously threatened to close the strait if provoked, and with tensions rising, that threat looms larger than ever.
What’s Next?
Iran and the U.S. are expected to meet on Sunday to continue nuclear negotiations, but optimism remains low. The UN nuclear watchdog has also declared Iran in violation of non-proliferation agreements, further complicating diplomacy.
As the oil prices surge after Israel strikes Iran, the world is left grappling with not only the economic consequences but also the political uncertainties that could shape global energy dynamics for months to come.
Disclaimer: This article is for informational purposes only. Please consult with financial experts before making investment decisions.
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FAQs
Why did oil prices surge after Israel’s strike on Iran?
Oil prices surged nearly 9% due to fears of disruption in Middle East oil supply after Israel’s attack on Iran’s nuclear facilities.
Will this conflict impact the Strait of Hormuz?
Although there’s no disruption yet, experts warn any escalation could affect this vital oil transit route through which 20% of global oil passes.
How high could oil prices go if tensions escalate further?
Analysts suggest that in a worst-case scenario, crude oil could surge to $120–$130 per barrel.
Is the global oil supply currently affected?
No major disruptions have been reported so far, but markets remain on edge due to heightened geopolitical risks.
What is the U.S. position on the Israel-Iran situation?
Former President Trump has urged Iran to negotiate and warned against further escalation.
