Oil Prices Surge As Israel Strikes Iran: Geopolitical Tensions Fuel Supply Fears

<p>Crude oil prices saw their sharpest single-day gains in over two years on Friday, spurred by mounting geopolitical tensions in the Middle East following Israeli airstrikes on Iran.</p>
<p>The market responded with alarm to news that Israel had launched attacks targeting Iran&rsquo;s military assets, including nuclear infrastructure and missile facilities&mdash;an action that has significantly heightened concerns over global oil supply security.</p>
<p>By 8:45 AM on Friday, Brent crude &nbsp;soared $6.29, marking a 9.07 per cent jump to $75.65 per barrel, after peaking at $78.50&mdash;the highest since January 27. Meanwhile, US West Texas Intermediate (WTI) crude saw a comparable leap, rising $6.43 or 9.45 per cent to reach $74.47 per barrel, following an intraday high of $77.62. These dramatic price movements mirrored the volatility seen in 2022 during Russia&rsquo;s invasion of Ukraine, underscoring the sensitivity of oil markets to geopolitical flashpoints, reported Reuters.</p>
<h2><strong>Markets Remain In High Risk Mode</strong></h2>
<p>Industry experts warned that the market is now factoring in a heavier risk premium, anticipating potential disruptions to supply. &ldquo;This has elevated geopolitical uncertainty significantly and requires the oil market to price in a larger risk premium for any potential supply disruptions,&rdquo; noted Warren Patterson and his team of analysts at ING.</p>
<p>Energy analysts and traders across Asia remain cautious in assessing the full impact on oil flows, with attention focused on Iran’s potential retaliation. A trader in Singapore remarked, &ldquo;It’s too early to tell but I think the market is worried about shutting off of the Strait of Hormuz,&rdquo; a critical chokepoint for global oil shipments.</p>
<p>According to MST Marquee senior analyst Saul Kavonic, a meaningful disruption would require a further escalation. He pointed out that up to 20 million barrels per day of supply could be at risk in a worst-case scenario involving targeted strikes or restricted access through the Strait of Hormuz.</p>
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<h2><strong>Iran Vows to Retaliate; Global Markets React Sharply</strong></h2>
<p>In response to the Israeli action, Iran’s Supreme Leader Ayatollah Ali Khamenei warned of severe consequences, saying Israel would face &ldquo;harsh punishment&rdquo; for the assault, which reportedly killed several top military commanders. US Secretary of State Marco Rubio clarified that Washington had no role in the operation, labeling it a “unilateral action” by Israel and urging Tehran to refrain from attacking American personnel or interests.</p>
<p>The heightened tension also rattled global financial markets. Asian stocks slid in early trading, led by a drop in US futures. Simultaneously, investors turned to traditional safe-haven assets like gold and the Swiss franc amid growing fears of regional instability.</p>
<p>&ldquo;Iran has announced an emergency and is preparing to retaliate, which raises the risk of not just disruptions but of contagion in other neighbouring oil producing nations too,&rdquo; said Priyanka Sachdeva, senior market analyst at Phillip Nova. She added that even without US involvement, the threat of a wider conflict is already influencing investor behavior.</p>
<p>As markets brace for potential aftershocks, all eyes remain on how Iran chooses to respond and whether the geopolitical friction will escalate into a prolonged regional crisis.</p>