Oil Surge: Israel’s Strike on Iran Shakes Global Markets

Oil Surge: Israel's Strike on Iran Shakes Global Markets

Oil prices experienced significant fluctuations on Friday following Israel’s retaliatory strike against Iran, leading to a momentary surge of up to 3%. The spike occurred after reports confirmed Israel’s missile attacks on Iran, escalating tensions in the already volatile Middle East.

The rise in Brent crude prices saw them exceeding $90 per barrel, triggered by news of Israel’s military actions against Iran late Thursday. The retaliatory strike by Israel was in response to over 300 drones and missiles launched by Iran towards the Jewish nation the previous Saturday, most of which were intercepted by Israel and its allies.

Israel’s confirmation of the retaliatory strike caused fluctuations in oil prices, with Brent futures spiking by as much as 3%. However, Iran’s denial of the attack to Reuters resulted in a subsequent drop in Brent prices, erasing earlier gains.

Despite the turbulence, Brent, the international benchmark, managed to close up by 0.2% at $87.29 per barrel. Conversely, the US oil benchmark, US West Texas Intermediate, also rose by 0.5%, settling at $83.14 per barrel.

Experts, including Rapidan Energy’s Director of Global Oil Service Clay Seigle, highlighted the potential risks for oil markets amidst the escalating conflict. The looming threat of disruptions in oil exports from the Arabian Gulf, responsible for over 20 million barrels per day, poses a significant concern.

Moreover, the Strait of Hormuz, a vital waterway between Oman and Iran through which a fifth of global oil production flows daily, could further drive oil prices upward if disrupted. Seigle cautioned that such a scenario could push oil prices into triple digits, impacting global economic stability.

Israel’s airstrikes in Iran, Syria, and Iraq have intensified regional tensions, with concerns over a potential spillover effect on oil markets. The recent events have raised alarms about the security of critical oil supply routes and facilities in the region.

While Israel has defended its actions, criticisms have arisen within the country. Israel’s National Security Minister’s remarks labeling the strike as ‘lame’ faced backlash from Prime Minister Benjamin Netanyahu’s inner circle, citing potential national security risks.

As the situation continues to unfold, assessment of the strike’s impact remains ongoing, particularly its target at Isfahan, housing Iran’s Natanz nuclear research facility and an essential airbase. International reactions vary, with the US not endorsing Israel’s response and maintaining a stance of non-participation in any counter-offensive.

The repercussions of these developments extend beyond the immediate region, influencing global oil prices and raising concerns about broader geopolitical stability. With uncertainties looming over the Middle East, the energy market remains on edge, closely monitoring any further escalations that could impact oil supply and prices.

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