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Euronews
4 days ago
- Business
- Euronews
Israel-Iran conflict fuels best month for energy stocks since 2022
The European energy sector is staging its strongest rally in years as escalating hostilities between Israel and Iran stoke fears of supply disruptions. The conflict is sending oil prices and energy shares sharply higher across the continent. The Euro STOXX 600 Energy index, which tracks major European oil and gas firms including BP, TotalEnergies, Eni and Repsol, has surged nearly 8% month-to-date, on track for its strongest monthly gain since October 2022. The rally stands in stark contrast to the broader Euro STOXX 600 index, which has declined by 1% over the same period. This 9 percentage point gap marks the sector's widest monthly outperformance since May 2022, underscoring the market's sharp pivot towards energy names as investors brace for prolonged geopolitical tensions in the Middle East. BP shares have climbed 9% so far in June, on course for their best month since September 2023. Italy's Eni has gained 9.1%, its strongest monthly showing since October 2022, while France's TotalEnergies is up 7%, a level last seen in April 2024. Portuguese energy company Galp Energia has led the sectoral gains with a 12% jump. The surge in energy equities mirrors a significant rally in oil prices. Brent crude has spiked to $75 a barrel, up 20% this month. That marks the largest monthly increase since November 2020, when news of successful COVID-19 vaccine trials first lifted global markets. Oil prices may stay higher for longer, with analysts warning that the geopolitical risk premium now embedded in crude markets could persist. Following Israeli airstrikes on Iranian nuclear and military targets, Tehran has raised the spectre of a potential closure of the Strait — a move that would choke off nearly 20 million barrels per day of crude and refined products, according to the International Energy Agency (IEA). While a complete shutdown remains unlikely, even limited disruptions could unsettle markets. 'There's the potential for disruptions to shipping through the Strait of Hormuz,' said Warren Patterson, head of commodities strategy at ING. According to the expert, almost a third of global seaborne oil passes through this checkpoint and any material threat to that route sends an immediate signal to energy markets. Patterson indicated that in the event of a significant disruption to flows through the Strait of Hormuz, oil prices could surge to $120 per barrel. On Tuesday, President Donald Trump convened a high-stakes meeting with his national security team inside the White House Situation Room to discuss the possibility of US military involvement alongside Israel in its war against Iran. Earlier that day, Trump had abruptly departed the G7 summit in Canada, fuelling speculation that a major foreign policy shift was imminent. Although no official decision has yet been announced, Iran issued a clear warning that it would target US military bases across the Middle East if Washington entered the conflict.
AU Financial Review
15-06-2025
- Business
- AU Financial Review
Oil traders brace for turmoil as Iran crisis imperils supply
Israeli strikes on Iranian energy infrastructure are spooking markets as investors become increasingly concerned that a longer-term oil price spike will fuel inflation and derail hopes of interest rate cuts. Israel attacked South Pars, the world's largest gas field, at the weekend, causing production to be partially suspended. In later attacks, Israel struck Tehran's main gas depot and one of the country's largest oil refineries in separate parts of the capital. Iran is the third-biggest producer in the Organisation of the Petroleum Exporting Countries. The targeting of energy assets represents a new front in the conflict, which erupted on Friday when Israel launched a wave of missiles at the Islamic Republic's nuclear program. Oil prices in the United States surged as much as 14 per cent, before settling 7.5 per cent higher at $US73 a barrel. But traders are bracing for more wild swings when oil market trading resumes on Monday, particularly after Iranian military officials said Tehran was considering closing the Strait of Hormuz – a key shipping route that connects the Persian Gulf and the Gulf of Oman. Crude oil futures posted their biggest single-day increase in more than three years on Friday. 'A significant disruption to these flows would be enough to push prices to $US120 a barrel,' warned ING's head of commodity strategy Warren Patterson. 'Higher oil prices clearly reduce the chances of the Federal Reserve cutting rates in the third quarter.' The escalation in the Middle East took place in the same week that US inflation data for May came in lower than expected, and as officials in Washington and Beijing appeared to be closing on a deal to avert the worst of the trade tariffs threatened earlier this year. The positive sentiment pushed the ASX to a fresh record last week, while US equities traded just 1.6 per cent shy of its all-time high. But Israel's strike on Iran triggered an abrupt reversal on Friday, dragging the S&P 500 down 1.1 per cent as investors fled to the safety of gold, which lifted prices of the precious metal back near all-time highs. Wall Street's 'fear gauge' – the VIX Index – topped 20, a level that indicates a divide of calm and nervousness in financial markets. The local sharemarket is expected to follow Wall Street lower, with futures indicating the S&P/ASX 200 will drop 0.2 per cent, or 20 points, to 8532 at the open on Monday.
Yahoo
13-06-2025
- Business
- Yahoo
Oil prices surge after Israel strikes Iran
Crude oil prices surged after Israel launched strikes at Iran. West Texas Intermediate and Brent crude oil futures both made significant gains. Oil prices jumped due to concerns over supply disruptions from the Middle East. Crude oil prices surged on Friday after Israel launched strikes at Iran, prompting fears of energy supply disruptions from the Middle East. US benchmark West Texas Intermediate crude oil futures jumped as much as 14% late Thursday. They've since come off highs and were trading almost 8% higher at about $73 a barrel at 8:30 a.m. ET. International benchmark Brent crude oil futures gained as much as 13% and were up about 7% above $74. JPMorgan analysts wrote on Friday that further Israeli strikes and Iranian retaliation could have a significant impact on global energy markets. "Our comfort zone remains with oil prices in the $60-65 range, as sustained gains in energy prices could have a dire impact on inflation, reversing the months-long trend of cooling consumer prices in the US." "This has elevated geopolitical uncertainty significantly and requires the oil market to price in a larger risk premium for any potential supply disruptions," wrote Warren Patterson, the head of commodities strategy at ING, on Friday. The strikes could mean higher gasoline prices and lower the chance of interest rate cuts, said Mohamed El-Erian, chief economic advisor at Allianz and president of Queens' College, Cambridge. "It's another shock to the stability of the US-led global economic order … whatever way you look at it, it's negative short-term and negative long-term," he told BBC Radio 4. Iran is the fourth-largest oil producer in the Organization of Petroleum Exporting Countries and has repeatedly threatened to close the Strait of Hormuz, a key oil shipping route for oil and gas that connects the Persian Gulf to the Gulf of Oman. Nearly a third of global seaborne oil moves through the Strait of Hormuz, wrote Patterson. Qatar, which accounts for one-fifth of the world's liquified natural gas trade, also uses this route to ship the fuel. "Unfortunately, there is no alternative route," wrote Patterson. "This would leave the global LNG market extremely tight, pushing European gas prices significantly higher." The sharp upswing in oil comes after a period of lull in the oil markets due to ample supply and slow demand. Until now, crude prices were broadly moving lower this year. Any sustained rise in energy prices would push up inflation and pump prices at a time of heightened economic uncertainty amid President Donald Trump's import tariffs. The spike in uncertainty following Israel's strike on Iran is putting a huge damper on market sentiment that had only been recovering recently after volatility in April following "Liberation Day." Just a few days ago, the S&P 500 was near its record high. Stock market futures were trading lower at 8:30 a.m. ET. S&P 500 futures: down 0.8% at 5,998 points Dow futures: down 0.9% at 42,600 Nasdaq futures: down 1.1% at 21,689 "This morning's alarming escalation is a blow to risk sentiment and comes at a crucial time after macro and systematic funds have rebuilt long positions and investor sentiment has rebounded to bullish levels," wrote Tony Sycamore, a market analyst at IG. Sentiment is likely to worsen ahead of the weekend as investors cut positions to avoid risk, he added. "Markets are on high alert, justifiably fearing a rapid escalation in the conflict, that may spiral into an unbridled war," wrote Vishnu Varathan, Mizuho's head of macro research for Asia, excluding Japan. European stock markets opened lower with the Stoxx Europe 600 index down almost 1% and Germany's Dax down 1.5%. London's FTSE 100 fell 0.4%, with oil major BP up 2.8% and Shell adding 1.6%. In Asia, Japan's Nikkei 225 closed 0.9% lower. Hong Kong's Hang Seng Index and China's CSI 300 ended down 0.6% and 0.7% respectively. Traditional haven assets were higher, with spot gold above $3,400 an ounce. US Treasurys rallied, with 10-year bond yields down to 4.35%, their lowest level in a month. The US dollar index was trading 0.6% higher after hitting a three-year low on Thursday. Israel's military launched a major preemptive strike against Iran's nuclear program on Friday morning local time. Israeli Prime Minister Benjamin Netanyahu said in a video statement on Friday that the operation will continue "for as many days as it takes." Netanyahu said Iran had produced enough highly enriched uranium for nine atom bombs, but did not provide any evidence to back his claim. Iran's nuclear program presents "a clear and present danger to Israel's very survival," he added. Israel's strike on Iran comes as the US was engaging Iran on a deal regarding its nuclear program. In Truth Social posts on Friday, President Donald Trump urged Iran to make a deal, warning of "even more brutal" Israeli attacks if it did not. Secretary of State Marco Rubio said in a statement on Thursday, after the attack, that Israel had taken "unilateral action" against Iran. "We are not involved in strikes against Iran and our top priority is protecting American forces in the region," he said. Read the original article on Business Insider
Yahoo
13-06-2025
- Business
- Yahoo
Oil prices surge after Israel strikes Iran
Crude oil prices surged after Israel launched strikes at Iran. West Texas Intermediate and Brent crude oil futures both made significant gains. Oil prices jumped due to concerns over supply disruptions from the Middle East. Crude oil prices surged on Friday after Israel launched strikes at Iran, prompting fears of energy supply disruptions from the Middle East. US benchmark West Texas Intermediate crude oil futures jumped as much as 14% late Thursday. They've since come off highs and were trading almost 8% higher at about $73 a barrel at 8:30 a.m. ET. International benchmark Brent crude oil futures gained as much as 13% and were up about 7% above $74. JPMorgan analysts wrote on Friday that further Israeli strikes and Iranian retaliation could have a significant impact on global energy markets. "Our comfort zone remains with oil prices in the $60-65 range, as sustained gains in energy prices could have a dire impact on inflation, reversing the months-long trend of cooling consumer prices in the US." "This has elevated geopolitical uncertainty significantly and requires the oil market to price in a larger risk premium for any potential supply disruptions," wrote Warren Patterson, the head of commodities strategy at ING, on Friday. The strikes could mean higher gasoline prices and lower the chance of interest rate cuts, said Mohamed El-Erian, chief economic advisor at Allianz and president of Queens' College, Cambridge. "It's another shock to the stability of the US-led global economic order … whatever way you look at it, it's negative short-term and negative long-term," he told BBC Radio 4. Iran is the fourth-largest oil producer in the Organization of Petroleum Exporting Countries and has repeatedly threatened to close the Strait of Hormuz, a key oil shipping route for oil and gas that connects the Persian Gulf to the Gulf of Oman. Nearly a third of global seaborne oil moves through the Strait of Hormuz, wrote Patterson. Qatar, which accounts for one-fifth of the world's liquified natural gas trade, also uses this route to ship the fuel. "Unfortunately, there is no alternative route," wrote Patterson. "This would leave the global LNG market extremely tight, pushing European gas prices significantly higher." The sharp upswing in oil comes after a period of lull in the oil markets due to ample supply and slow demand. Until now, crude prices were broadly moving lower this year. Any sustained rise in energy prices would push up inflation and pump prices at a time of heightened economic uncertainty amid President Donald Trump's import tariffs. The spike in uncertainty following Israel's strike on Iran is putting a huge damper on market sentiment that had only been recovering recently after volatility in April following "Liberation Day." Just a few days ago, the S&P 500 was near its record high. Stock market futures were trading lower at 8:30 a.m. ET. S&P 500 futures: down 0.8% at 5,998 points Dow futures: down 0.9% at 42,600 Nasdaq futures: down 1.1% at 21,689 "This morning's alarming escalation is a blow to risk sentiment and comes at a crucial time after macro and systematic funds have rebuilt long positions and investor sentiment has rebounded to bullish levels," wrote Tony Sycamore, a market analyst at IG. Sentiment is likely to worsen ahead of the weekend as investors cut positions to avoid risk, he added. "Markets are on high alert, justifiably fearing a rapid escalation in the conflict, that may spiral into an unbridled war," wrote Vishnu Varathan, Mizuho's head of macro research for Asia, excluding Japan. European stock markets opened lower with the Stoxx Europe 600 index down almost 1% and Germany's Dax down 1.5%. London's FTSE 100 fell 0.4%, with oil major BP up 2.8% and Shell adding 1.6%. In Asia, Japan's Nikkei 225 closed 0.9% lower. Hong Kong's Hang Seng Index and China's CSI 300 ended down 0.6% and 0.7% respectively. Traditional haven assets were higher, with spot gold above $3,400 an ounce. US Treasurys rallied, with 10-year bond yields down to 4.35%, their lowest level in a month. The US dollar index was trading 0.6% higher after hitting a three-year low on Thursday. Israel's military launched a major preemptive strike against Iran's nuclear program on Friday morning local time. Israeli Prime Minister Benjamin Netanyahu said in a video statement on Friday that the operation will continue "for as many days as it takes." Netanyahu said Iran had produced enough highly enriched uranium for nine atom bombs, but did not provide any evidence to back his claim. Iran's nuclear program presents "a clear and present danger to Israel's very survival," he added. Israel's strike on Iran comes as the US was engaging Iran on a deal regarding its nuclear program. In Truth Social posts on Friday, President Donald Trump urged Iran to make a deal, warning of "even more brutal" Israeli attacks if it did not. Secretary of State Marco Rubio said in a statement on Thursday, after the attack, that Israel had taken "unilateral action" against Iran. "We are not involved in strikes against Iran and our top priority is protecting American forces in the region," he said. Read the original article on Business Insider
Yahoo
13-06-2025
- Business
- Yahoo
Oil Outlook in Flux as Analysts Revise Views After Israel Strike
(Bloomberg) -- Israel's strike on Iran has injected a fresh bout of geopolitical risk into an oil market that has been in the doldrums due to concerns about the global economy and supply increases from OPEC+. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? NY Long Island Rail Service Resumes After Grand Central Fire Brent crude jumped more than 13% following the attacks, which targeted Iran's nuclear program and military capabilities, in a major escalation in tensions between two major military powers that risks spiraling into a regional war. Fears of a glut later this year are now being replaced by calls for higher prices, at least in the short term. Much will depend on Iran's response and whether key energy assets in the Middle East or tanker traffic through the region are affected. Here's what market watchers are saying: ING If Iran's midstream and upstream assets are targeted, as much as 1.7 million barrels per day of export supply could be at risk, 'enough to push the oil market from a surplus over the second half of this year into a deficit,' Warren Patterson, head of commodities strategy at ING Groep NV, said in a note. 'This scenario could see Brent spiking to $80 a barrel, although we believe prices will likely settle around $75.' If continued escalation leads to shipping disruptions in the Strait of Hormuz, roughly 14 million barrels per day of oil supply could be at risk, with significant disruptions 'enough to push prices to $120 per barrel,' Patterson said. 'If disruptions persist towards the end of the year, we could see Brent trading to new record highs, surpassing the record high of close to $150 in 2008.' Saxo Markets 'Oil could spike toward $80 if Middle East tensions escalate and supply risks materialize, but rising OPEC+ output may cap gains and revive oversupply concerns into autumn,' said Charu Chanana, chief investment strategist at Saxo Markets Ltd. in Singapore. 'A worst-case scenario — such as a closure of the Strait of Hormuz or a disruption to Iran's 2.1 million barrels per day in exports — could have serious implications for global oil supply and inflation expectations,' she said. Rystad Energy Iran's oil output has recovered since 2019 on higher Chinese buying, with production recently as high as 4 million barrels a day, said Mukesh Sahdev, head of commodities markets - oil at Rystad Energy A/S. 'Iran's potential retaliation and blockage of the Straits of Hormuz can' pose a risk to crude supplies, he said. Still, 'given the stated US goal of negotiation, it is unlikely that the conflict will escalate into a full-blown war.' Westpac Banking 'Given that the strikes appear to have been directed more at the Iranian military general staff, including the head of the IRGC and senior nuclear scientists, and that the US was not involved, that suggests that what we saw today was more of a pre-emptive strike and less of a sustained military conflict,' said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp. 'Traders will, however, be super-focused on Iran's response and how targeted it is on Israel, versus proxy attacks. Risks going into the weekend are very high, and a push above the January highs for crude is very possible.' 'However, bigger picture, we remain of the view that, as we move into the third quarter, we will see prices probing the lower end of the $60 to $65 range, with risks of prices below $60 as we move into the fourth quarter.' Phillip Nova 'Due to the worsening situation, oil investors appear to be securing more supplies before the weekend,' said Priyanka Sachdeva, senior market analyst for brokerage Phillip Nova Pte in Singapore. 'Some technical short-covering may be occurring after a significant rise of 15% in oil prices in June, which has contributed to an upward trend.' MST Marquee 'The scope of this attack is at the more severe end of the range than most anticipated for any attack,' said Saul Kavonic, an energy analyst at MST Marquee. Iranian retaliation 'could see the US and other parties in the region drawn in,' he said. 'The conflict would need to escalate to the point of Iranian retaliation on oil infrastructure in the region before oil supply is actually materially impacted. Iran could hinder up to 20 million barrels per day of oil supply via attacks on infrastructure or limiting passage through the Strait of Hormuz in an extreme scenario. There is no sign of this yet.' Oil Brokerage 'A threat of war in the Middle East is material to freight rates,' said Anoop Singh, Oil Brokerage Ltd.'s global head of shipping research. 'There isn't a deterministic path to this brewing conflict, however a short-term spike in freight rates is likely.' At least 15% of the global very-large crude carrier fleet, are in the Middle East Gulf at any given time, with about 20 of them transiting through the Straits of Hormuz each day. Qisheng Futures 'The crude oil market is projected to have around a $3 to $5 short-term upside potential' based on the market reaction after the earlier two rounds of conflict between Iran and Israel in 2024, said Gao Jian, a Shandong-based analyst at Qisheng Futures Co. Even before the strike, prices have already partially priced in the expectations of escalation. SDIC Essence Futures While macroeconomic and supply-demand factors don't support prices surging further, 'investors may consider buying low-cost call options to hedge against extreme geopolitical risks,' said Gao Mingyu, chief energy analyst at SDIC Essence Futures Co. 'Once the geopolitical situation becomes clearer, they can then position for short-selling at higher levels.' American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom As Companies Abandon Climate Pledges, Is There a Silver Lining? ©2025 Bloomberg L.P.
