Oil jumps nearly 9% after Israel's strikes on Iran
Oil prices jumped nearly 9% on Friday to near multi-month highs after Israel launched strikes against Iran, sparking Iranian retaliation and raising worries about a disruption in Middle East oil supplies.
Brent crude futures were up $6.19, or around 8.9%, to $75.55 a barrel at 1019 GMT, after hitting an intraday high of $78.50, the highest since January 27.
U.S. West Texas Intermediate crude was up $6.22, or 9.1%, at $74.26 after hitting $77.62, its highest level since January 21.
Friday's gains were the largest intraday moves for both contracts since 2022, after Russia's invasion of Ukraine caused a spike in energy prices.
Israel said it had targeted Iran's nuclear facilities, ballistic missile factories and military commanders on Friday at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon, while Iran has promised a harsh response.
U.S. President Donald Trump urged Iran to
make a deal
over its nuclear programme, to put an end to the "next already planned attacks."
The National Iranian Oil Refining and Distribution Company said oil refining and storage facilities had not been damaged and continued to operate.
The primary concern was whether the latest developments would affect the Strait of Hormuz, said SEB analyst Ole Hvalbye. The key waterway had been at risk of impact from increased regional volatility previously but had not been affected so far, Hvalbye said.
There also was no impact to oil flow in the region so far, he added.
About a fifth of the world's total oil consumption passes through the strait, or some 18 to 19 million barrels per day (bpd) of oil, condensate and fuel.
Analysts at consultancy Sparta Commodities said that any significant crude supply disruptions would lead to sour crude grades being marginally priced out of refineries in favour of light sweets.
Under a worst case scenario, JPMorgan analysts said on Thursday that closing the strait or a retaliatory response from major oil producing countries in the region could lead to oil prices surging to $120-130 a barrel, nearly double their current base case forecast.
"The key question now is whether this oil rally will last longer than the weekend or a week - our signal is that there is a lower probability of a full-blown war, and the oil price rally will likely encounter resistance," said Janiv Shah, analyst at Rystad.
"Fundamentals show nearly all Iranian exports going to China, so Chinese discounted purchases would be most at risk here. OPEC+ spare capacity can provide the stabilizing force," he added.
In other markets, stocks dived and there was a rush to safe havens such as gold and the Swiss franc.
An increase in oil prices would also dampen the outlook for the German economy, the economic institute DIW Berlin said on Friday. It is the only G7 nation that has recorded no economic growth for two consecutive years.
"The increased uncertainty speaks in favour of a higher risk premium on the oil price, which is why it is unlikely to fall below $70 on a sustained basis for the time being ... Fundamental data is taking a back seat in the current situation," analysts at Commerzbank said in a note.
(Reporting by Seher Dareen and Florence Tan; Editing by Stephen Coates, Rachna Uppal and Kim Coghill)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
28 minutes ago
- Khaleej Times
'Humanity in crisis': World leaders condemn US attack on Iran
[Editor's Note: Follow our live blog for real-time updates on the latest developments in the Israel-Iran conflict.] The reaction of world leaders after US forces struck three Iranian nuclear sites on Sunday Iran time ranged from Israel lauding President Donald Trump's decision to the UN calling for de-escalation and some countries condemning the attacks. Israel Prime Minister Benjamin Netanyahu "Congratulations, President Trump. Your bold decision to target Iran's nuclear facilities with the awesome and righteous might of the United States will change history... History will record that President Trump acted to deny the world's most dangerous regime the world's most dangerous weapons." UN Secretary-General Antonio Guterres "I am gravely alarmed by the use of force by the United States against Iran today. This is a dangerous escalation in a region already on the edge — and a direct threat to international peace and security. There is a growing risk that this conflict could rapidly get out of control — with catastrophic consequences for civilians, the region, and the world. I call on Member States to de-escalate and to uphold their obligations under the UN Charter and other rules of international law. At this perilous hour, it is critical to avoid a spiral of chaos. There is no military solution. The only path forward is diplomacy. The only hope is peace." Venezuela Foreign Minister Yvan Gil "Venezuela condemns US military aggression against Iran and demands an immediate cessation of hostilities. The Bolivarian Republic of Venezuela firmly and categorically condemns the bombing carried out by the United States military, at the request of the State of Israel, against nuclear facilities in the Islamic Republic of Iran, including the Fordow, Natanz, and Isfahan complexes." Mexico Foreign Ministry "The ministry urgently calls for diplomatic dialogue for peace between the parties involved in the Middle East conflict. In keeping with our constitutional principles of foreign policy and our country's pacifist conviction, we reiterate our call to de-escalate tensions in the region. The restoration of peaceful coexistence among the states of the region is the highest priority." "We strongly condemn the US bombing of Iran's nuclear facilities, which constitutes a dangerous escalation of the conflict in the Middle East. The aggression seriously violates the UN Charter and international law and plunges humanity into a crisis with irreversible consequences."
Al Etihad
an hour ago
- Al Etihad
Trump says Iran must make peace or "will go after" other targets
22 June 2025 06:27 WASHINGTON (Reuters) US President Donald Trump said on Saturday that Iran must now make peace or "we will go after" other targets in Iran after US strikes that he said "obliterated" Iranian nuclear sites."There will be either peace or there will be tragedy for Iran far greater than we have witnessed over the last eight days," Trump said in a nationally televised speech at the White days of deliberation and long before his self-imposed two-week deadline, Trump's decision to join Israel's military campaign against its major rival Iran represents a major escalation of the conflict."The strikes were a spectacular military success," Trump said in a televised Oval Office address. "Iran's key nuclear enrichment facilities have been completely and totally obliterated."In his brief speech, Trump said Iran's future held "either peace or tragedy," and that there were many other targets that could be hit by the US military."If peace does not come quickly, we will go after those other targets with precision, speed and skill."Trump said US forces struck Iran's three principal nuclear sites: Natanz, Isfahan and Fordow. He told Fox News six bunker-buster bombs were dropped on Fordow, while 30 Tomahawk missiles were fired against other nuclear sites. Israeli Prime Minister Benjamin Netanyahu congratulated Trump on his "bold decision" which he said will change history. Israel-Iran Conflict Continue full coverage
Al Etihad
an hour ago
- Al Etihad
UN chief Guterres says US strike on Iran a dangerous escalation
22 June 2025 06:15 UNITED NATIONS (Reuters) United Nations Secretary-General Antonio Guterres on Saturday branded the US strikes on Iran as a "dangerous escalation in a region already on the edge - and a direct threat to international peace and security.""There is a growing risk that this conflict could rapidly get out of control - with catastrophic consequences for civilians, the region, and the world," Guterres said in a statement. Israel-Iran Conflict Continue full coverage "At this perilous hour, it is critical to avoid a spiral of chaos. There is no military solution. The only path forward is diplomacy. The only hope is peace," he said.
