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Oil prices surged in Asian trading on Friday after Israel launched a major pre-emptive strike on Iran, escalating tensions in the Middle East and sparking fears of broader conflict and potential disruptions to global oil supplies.
As of 21:22 ET (01:22 GMT), Brent Oil Futures for July delivery jumped 8.5% to $75.15 per barrel, marking its highest level since early February. West Texas Intermediate (WTI) crude futures also spiked 8.4%, reaching $73.68 per barrel.
Israel Strikes Iran, Escalating Tensions
The sharp rise in oil prices followed a large-scale preemptive airstrike by Israel on Iran early Friday, targeting dozens of military and nuclear sites, according to media reports. Israel’s Defence Minister warned that the attack would likely provoke missile and drone retaliation from Iran, which could escalate the situation further.
Explosions were reported in Tehran, and state media confirmed that Iran’s air defenses had been fully activated in response to the strikes.
Two U.S. officials told Reuters that Israel acted independently without U.S. involvement in the military action, although CNN reported that President Donald Trump convened a cabinet meeting to discuss the situation.
Geopolitical Risk Premium Drives Oil Prices Higher
The immediate market reaction to Israel’s strike was a sharp rise in oil prices, fueled by a geopolitical risk premium. The strike heightened concerns about the potential for disruptions to crude oil supplies, especially given the Middle East’s crucial role in global oil production and transportation.
With tensions escalating between Israel and Iran, traders are closely monitoring developments for signs of further escalation, which could have significant implications for global energy markets.
