Oil jumps more than 7% as Israel strikes Iran, rattling investors
Oil prices jumped more than 7% on Friday, hitting their highest in months after Israel said it struck Iran, dramatically escalating tensions in the Middle East and raising worries about disrupted oil supplies.
Brent crude futures rose $5.29, or 7.63%, to $74.65 a barrel by 0142 GMT after hitting an intraday high of $75.32, the highest since April 2. U.S. West Texas Intermediate crude was up $5.38, or 7.91%, at $73.42 a barrel after hitting a high of $74.35, the loftiest since February 3.
Israel said early on Friday that it struck Iran, and Iranian media said explosions were heard in Tehran as tensions mounted over U.S. efforts to win Iran's agreement to halt production of material for an atomic bomb.
"The Israeli attack on Iran has heightened the risk premium further," MST Marquee senior energy analyst Saul Kavonic 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," he said, adding that 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.
Israel's strikes on Iran are aimed at hurting its nuclear infrastructure, its ballistic missile factories and many of its military capabilities, Prime Minister Benjamin Netanyahu said.
U.S. Secretary of State Marco Rubio on Thursday called Israel's strikes against Iran a "unilateral action" and said Washington was not involved while also urging Tehran not to target U.S. interests or personnel in the region.
"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," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"Although Trump has shown reluctance to participate, U.S. involvement could further raise concerns."
In other markets, stocks dived in early Asian trade, led by a selloff in U.S. futures, while investors scurried to safe havens such as gold and the Swiss franc.
IG market analyst Tony Sycamore said the alarming escalation is a blow to risk sentiment in financial markets.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
an hour ago
- The National
Iran says Israel's actions a 'declaration of war' and accuses US of supporting strikes
Iran 's envoy to the UN accused the US on Friday of providing full political and intelligence support to Israeli strikes on Iranian territory, calling the attacks a 'declaration of war' that killed dozens, including civilians. Iranian ambassador Amir Saeid Iravani told the UN Security Council that 78 people had been killed in the strikes, with more than 320 others injured. 'The majority of them are civilians, including women and children,' he said. 'We will not forget that our people lost their lives as a result of the Israeli attacks with American weapons. These actions amount to a declaration of war.' He accused Israel of seeking to derail nuclear deal negotiations with the US and escalate tension in the region. 'This aggression was intentional, co-ordinated and fully backed by a permanent member of this council,' he said. 'The United States' complicity in this terrorist attack is beyond doubt." Israel's ambassador to the UN Danny Danon echoed this, saying the strikes on Iran are an act of "national preservation' which it undertook alone. 'Imagine when the head of the snake would do with a nuclear warhead?' he said. 'We acted because history has taught us that silence is complicity and hesitation is fatal.' He told the council that Israeli intelligence had confirmed that Iran could have produced enough fissile material for several nuclear bombs within days. 'We struck the core of the nuclear programme, the underground enrichment facilities at Natanz. This facility was operating at a military grade capacity. Intelligence confirmed that within days, Iran could have produced enough material for multiple bombs,' he said. On Thursday, Iran was censured by the UN's nuclear watchdog for not complying with obligations meant to prevent it from developing a nuclear weapon. US senior State Department official McCoy Pitt told the council that Washington was informed in advance of Israel's strikes on Iranian targets but was not militarily involved. Mr Pitt said Israel had advised the US that 'this action' was necessary for its self-defence. 'Every sovereign nation has the right to defend itself, and Israel is no exception,' he said. 'President [Donald] Trump has repeatedly said, this dangerous regime cannot be allowed to have nuclear weapons.' He added that Washington continues to pursue a diplomatic solution aimed at preventing Tehran from acquiring nuclear weapons or 'threatening' regional stability. 'Iran's leadership would be wise to negotiate at this time,' he asserted. The head of the UN nuclear watchdog told the Security Council that the aboveground section of Iran's pilot fuel enrichment plant at Natanz where uranium was being enriched up to 60 per cent has been destroyed in recent Israeli strikes. 'This facility houses both the main fuel enrichment plant and the pilot enrichment plant,' said International Atomic Energy Agency director general Rafael Grossi. Mr Grossi said radiation levels at the Natanz site remained unchanged, with no external radiological impact on the population or the environment. However, he warned of contamination risks within the facility. 'There is radiological and chemical contamination inside the Natanz facilities due to the impacts,' he said. Mr Grossi also said that Iranian authorities informed them of attacks on two other nuclear facilities, Fordow and Isfahan, 'where a fuel plate fabrication plant, a fuel manufacturing plant, a uranium conversion facility … are located'. Russia strongly condemned Israel's attacks on Iran, with its ambassador saying the "military adventure pushes the region to the brink of a large-scale war, and the responsibility for all of the consequences of these actions lies fully with the Israeli leadership and those who encourage them". 'One is left with the impression that the leadership of Israel is convinced that they have a completely free hand in the region, and they probably think that Israel can flout any legal norms and replace all international bodies, including the Security Council and IAEA,' Vasily Nebenzya said. China's ambassador Fu Cong urged Israel to immediately cease all military 'adventurism' and called on countries with 'significant' influence over Israel to play a 'constructive' role.
Middle East Eye
2 hours ago
- Middle East Eye
These questions are often ignored in the Israel-Iran story. We asked a panel of experts
Israel's attacks on Iran on Friday and the killing of several high-level figures in its military and science sectors have roiled the region. Tensions between the two nations are well-documented and longstanding, and both the US and Israel have carried out attacks like this, albeit on a smaller scale, on other prominent Iranian figures in the past. But why does this keep happening, and how is the US trying to distance itself from it? Can Israel go this far without expecting its own officials to be targeted? And exactly how dangerous is it to strike nuclear facilities on either side? Middle East Eye put the lesser-asked questions to five experts on international relations, conflict, nuclear proliferation, and the region at large. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters Here is what they said, edited for length and clarity. If the US was informed ahead of time and also supplied weapons to Israel, how can Secretary of State Marco Rubio say the US was not involved? Jamal Abdi, President, National Iranian American Council: "This is about creating a narrative of plausible deniability to potentially give Iran a face-saving way to continue talking to the United States [towards a new nuclear deal]. I don't think it's going to work, and I think Trump has already stepped all over that by now, basically taking credit, after seeming to distance the US." Anthony Wanis-St John, conflict resolution specialist, American University: "It's a verbal obfuscation. It means that operationally, we didn't support it." Miles Pomper, Senior Fellow, James Martin Center for Nonproliferation: "Because the Russians and the Chinese are affiliated with the Iranians, [the US will] try not to elevate the level to something beyond a regional conflict, to some global conflict." What is the difference between a 'preemptive strike' and a 'preventive strike'. Are they not both acts of war? Wanis-St. John: "These are certainly acts of war. There's no question about it, the Israelis like to call attention and use "preemptive" and "preventive" doctrines in their military strikes, since every country under international laws and norms is allowed to defend itself against aggression, but no country is supposed to lawfully commit aggressions against another country." Sam Ratner, policy director, Win Without War: "'Preemptive strike' does seem to be, from a definitional standpoint, a misnomer from Israel... this is a war of choice from [Israeli Prime Minister] Benjamin Netanyahu." Pomper: "It's not a preemptive strike, because that would be [like] the Six Day War, where the planes are on the tarmac and about to attack you, and then you hit them. 'Preventive' is a stop to a long-term threat to Israel. And you know the Iranians aren't shy about threatening." Negar Mortazavi, host of the Iran Podcast: "If it's not [couched as] preemptive, then it will be seen differently both from the public opinion and the global opinion... and we know that Israel cares a lot about its image, about its standing in the international community, and that has deteriorated very fast [since its war on Gaza]." The international community has long tolerated, and sometimes cheered on, Israel's string of extra-judicial assassinations. Why? Abdi: "Israel has a lot of political power and very important friends, most importantly, the United States." Mortazavi: "Powerful western countries have provided not just financial and armed support, but also diplomatic support and cover to Israel in the UN Security Council... the contradiction - or in a way, that oxymoron - that Israel is dealing with, is that they're a country that came out of the United Nations [in 1948]." Ratner: "In the post-9/11 era in particular, we've seen not just from the Israeli government, but from Iranian governments, including our own, in fact, and in particular our own, a real sort of generational change of attitude toward the use of assassination. We see it in our drone programme. The erosion of the norm against assassination is bad for diplomacy, bad for international relations, and bad for peace." Looking at the nature of Israel's attacks, can Iran retaliate in the same way? Wanis-St John: "I'm not sure that they can, operationally. I've never seen Iran do that against Israel.... you really need a lot of information about where [targets] are and where they're moving and how they're protected at night. That requires a lot of infrastructure. I'm not sure that the Iranians have that." Abdi: "If we're saying there are no laws, there is no accountability, you can conduct extra-judicial killings with impunity, then it would seem that would no longer restrain any actor from engaging in the same types of activities. But we know that that's not how the world works, and that certain countries have been given a carte blanche to do whatever they want." Mortazavi: "The condemnation would be so different... imagine if the same was done by Iran. Israeli officials also have homes and families." Why can't Iran have a nuclear bomb if Israel does? Mortazavi: "Iran is a signatory to the NPT, the Non-Proliferation Treaty. They have committed to not building nuclear weapons [and] they have a civilian programme. According to US intelligence, they don't have a weapons programme. At the same time, Israel has an undeclared weapons programme [and] many nuclear warheads. They're not a signatory to any international monitoring and safeguards." Ratner: "Our position on this is that we are opposed to nuclear proliferation and [in favour of] nuclear disarmament. Nuclear weapons are unimaginably destructive forces, and the more hands those weapons are in, the more likely that nuclear warfare becomes. If we add another country to the nuclear club, how many more countries will join?" Abdi: "Iran has threatened before that if something like [Friday's attacks] happened, they would abandon the NPT, and then there would be no international law saying they're not allowed to build nuclear weapons. They could do what Israel did, and develop a clandestine programme, and not be held accountable to any treaties or agreements or anything, and it's just the law of the jungle, and everybody gets a nuke." Israel has always said it wants to take out Iran's nuclear facilities. Isn't that dangerous? Pomper: "I think, as opposed to attacking a nuclear power plant that's got actual radioactive material, like Zaporizhzhia in Ukraine, it's different... You don't have that kind of concentration. And so you may have environmental and other damages, but you're not likely to get a widespread radiation danger from it." Wanis-St John: "They shouldn't really be targeted if they're not military programmes. No one has said that the Iranians are building a nuclear weapon at this time. They don't claim to be making one, and nobody on the outside claims that they are making one... The Israeli attack is really meant to send them a signal that any progress towards weapons-grade enrichment is not going to be tolerated by Israel." Ratner: "The bigger concern... is that Iran has made clear statements and threats that if the Israeli government strikes its nuclear facilities, that it will respond by striking US targets in the region. And what we see from Benjamin Netanyahu is a desire for exactly that to happen. His interest is in starting a chain of events that drags the US into war on his side, because the Israeli military would have a very difficult time pursuing regime change in Iran on its own."
Economy ME
3 hours ago
- Economy ME
Dubai gold prices rise AED3.75, global rates hit near 2-month high on Middle East tensions
Gold prices surged to their highest in nearly two months on Friday, and were on track for a weekly gain as investors sought safe-haven assets after heightened Middle East tensions. In Dubai, gold rates surged, with 24-carat gold gaining AED3.75 to AED412.5 and 22-carat gold rising AED3.25 to AED381.75. Additionally, 21-carat gold increased by AED3.75 to 366.5, while 18-carat gold inched up AED2.75 to AED313.75. Globally, spot gold climbed 1.38 percent to $3,426.01 at 4:07 GMT, after hitting its highest since April 22 earlier in the session. Bullion has gained more than 3.5 percent so far this week. Meanwhile, U.S. gold futures rose 1.40 percent to $3,449.95. Investor focus shifts to safe-haven assets Gold prices surged as geopolitical tensions in the Middle East escalated after Israel targeted Iran's nuclear facilities. Rising tensions in the region have shifted investor focus from trade negotiations as they head towards safe-haven assets in response. Gold prices have surged over their resistance around $3,400 on news of the airstrikes, and further upside is expected if tensions escalate further. Fed to cut rates earlier as labor market cools Elsewhere, new data signaled a cooling in the U.S. labor market and subdued inflation pressures. New applications for unemployment benefits held at an eight-month high last week, while slowing domestic demand helped restrain producer prices in May. The data, released a day after the Labor Department reported a moderate rise in consumer prices in May, bolstered expectations of an earlier rate cut by the Federal Reserve. Traders are now expecting a Fed interest rate cut of 55 basis points by the end of the year, starting in September rather than October as previously expected. Read: Boeing shares plunge 8 percent following India plane crash Other precious metals As gold prices surged to a near two-month high, the precious metals market was largely down. Spot silver fell 0.23 percent to $36.29 per ounce, platinum dipped 0.83 percent to $1,284.44, after hovering near a more than 4-year high in the previous session, while palladium was down 0.15 percent to $1,053.99.
